Microsoft has updated its rather extensive Xbox Live "Code of Conduct" to allow the inclusion of race, nationality, religion and sexual orientation in Gamertags and profiles.
"Under our previous policy, some of these expressions of self-identification were not allowed in Gamertags or profiles to prevent the use of these terms as insults or slurs," explained Xbox Live General Manager Marc Whitten.
"However we have since heard feedback from our customers that while the spirit of this approach was genuine, it inadvertently excluded a part of our Xbox Live community. This update also comes hand-in-hand with increased stringency and enforcement to prevent the misuse of these terms."
Meanwhile, Destructoid's Jim Sterling noted that gamers will be permitted to use a number of terms - including Gay, Lesbian, Bisexual, Transgendered and Straight - to denote their sexuality.
"Microsoft had been working with GLAAD and [its own] LGBT community to narrow down the terms. Use of those words in an insulting manner won't be tolerated either, so it seems as if Microsoft has retracted its scorched earth policy and will now be reviewing the use of these words on a case-by-case basis," wrote Sterling.
"It may not seem like a big deal to many of you, but it was certainly a big deal to some, and it's very cool that Microsoft has taken the stick out of its arse and decided to judge the use of these words on their own merits. Microsoft doesn't do everything right, but this was definitely a good thing. Well done!"