One of the reasons Xbox 360 owners shouldn't be allowed to use unauthorized third-party memory cards is that users sign away their right to do so when purchasing the console, according to Microsoft.
This argument, spotted by G4 and Techflash, is part of Microsoft's legal battle against Datel, a third-party memory maker whose Xbox 360 cards were rendered useless in a November console update. Users were warned in November that they'd have to ditch their unauthorized memory cards before the update or lose their data forever.
The main maker of these unauthorized memory cards is Datel, whose 2 GB card costs $40, while Microsoft's own 512 MB card costs $30. Datel sued Microsoft on anti-trust grounds, arguing that this is an abuse of Microsoft's standing as the leader in "Multiplayer Online Dedicated Gaming Systems." It's an important distinction, because Nintendo's Wii is actually the leader in home consoles, but Datel says the Wii has a different market of players. Microsoft disagrees.
In any case, Microsoft says that the user agreement players approve when activating the Xbox 360 acknowledges that unauthorized hardware may not be used with the console. The company maintains that unauthorized memory cards make it easy for players to cheat, pointing to Datel marketing materials that claim its memory cards are "preloaded with hundreds of game-busting cheats."
Interestingly enough, Microsoft channeled Apple in its argument against Datel. Last November, a U.S. District Court judge ruled in Apple's favor in its lawsuit against Psystar, a company that sells computers running the Mac OS X operating system. If Apple can prevent a third-party from selling unauthorized devices, so should Microsoft, the company argued.
Regardless of whose argument has more merit, from a consumer standpoint it comes back to being stuck with a device that Microsoft remotely killed. Microsoft channels its user agreement to justify the move, but even customers who skim through the agreement might not understand the implications. It's Microsoft's responsibility to educate consumers on how to determine which devices are authorized, unless the company doesn't mind looking like the bad guy.
