Here's your heartwarming story for the day. Microsoft has teamed up with Companions in Courage in order to bring "hundreds" of Xbox 360 kiosks to children's hospitals across the nation, and the gaming stations have already been installed at Morgan Stanley Children's Hospital of New York-Presbyterian, Children's Hospital & Regional Medical Center of Seattle and the Children's Hospital of Orange County, California. The customized units are "hospital-friendly" and come pre-loaded with a variety of E and E10+ rated games, Y-rated television programs, G-rated movies and the Xbox Live headset / Vision camera in order for gamers to play online. Speaking of, each kiosk is wired to a private Live network which "allows hospitalized children across the country to play games and chat" with each other. There's no word on where the stations are slated to arrive outside of the three venues already mentioned, but those interested in broadening the reach of the endeavor can feel free to donate to the cause.

[Via OhGizmo]

It wasn't all Zune gaming at Microsoft's GDC keynote this morning -- a lot of time was spent discussing Community Games, the new official name for XNA-based games. Amateur devs will get "creator identities" along with their gamertags, and Live members can rate, grade, and discuss your efforts. Of course, as we've heard, games can move from the 360 to PCs to second-gen Zunes, which is definitely pretty cool, but it'll be interesting to see what that means for devs who want to try and take advantage of the 360's horsepower -- will they be restrict their code to a specific platform? While we wait for those answers, it looks like we'll be able to get a taste of what Community Games have to offer right away -- Microsoft announced that the first seven XNA-based games are available immediately, with an open beta to begin in spring and full-on launch by the end of the year. List of games after the jump -- but what are you doing reading this when you could be playing?

Update: We just tried downloading RocketBall and the process is totally different than you'd expect. First you have to download the XNA Launcher, which is under New Arrivals in the Marketplace blade -- but you don't need a membership, so skip that, and the XNA ad that displays points you to the wrong thing, so ignore that as well. Then head over to the Games blade and select Games Library, but don't open the Launcher, cause it'll just kick you out. Instead, press Y to view the list of games and download one. So far the "YouTube of games" seems a bit convoluted -- hopefully the next Dashboard update makes this all a bit simpler.

Make no mistake, we've seen curious job postings lead to changes in our favorite gizmos before, and hopefully, a recent ad on Microsoft's website is no different. A listing seeking a Program Manager explicitly states that it's looking for someone to "be involved in the next release of Xbox," and wants that very individual to be "part of the Xbox Live team that's responsible for creating a completely new way for mainstream audiences to enjoy the Xbox and Live." Better still, the description suggests that the team would be "building the games, the console interface and logic, and the server support for a totally new Live experience." Granted, there's nothing more to go on than this at the moment, but we can't help but be a teensy bit excited about the notion of an overhauled Xbox Live.

[Via GamesIndustry]

It looks like we won't be seeing another barrage of Xbox Live status updates like we saw in the past few weeks anytime soon, at least as long as that little lawsuit is going on down in Texas. That unfortunate word comes from none other than Major Nelson, who said in his podcast that Microsoft can no longer update gamers on the situation due to "legal issues." Those constraints apparently even extend as far as the Major's Twitter page, leaving gamers in the dark in the event of yet another Xbox Live outage. In case you missed it, the lawsuit in Texas was filed after the outage in December by three disgruntled gamers, who claim that Microsoft knew activity would be at a peak during that time of year but "failed to provide adequate access and service to Xbox Live and its subscribers." No word on any progress in that suit just yet, but we're guessing that Microsoft and Xbox users alike are hoping it gets wrapped up as soon as possible.

[Via Xbox 360 Fanboy, thanks Jonathan]

Update: Microsoft may not be saying much about any future Xbox Live problems, but it is getting more specific about the free Xbox Live game its offering as a way of saying sorry. The game itself is Undertow, and it'll be available for download to Gold and Silver members starting next Wednesday at 2:00AM PST. Thankfully, according to Major Nelson, those that have already spent their hard earned points on the game can contact customer support who'll "take care of you." Just don't dally too long, as the free game will only be available though next Sunday.

While HD DVD and Blu-ray have both lost key supporters recently, Microsoft's Xbox Live Marketplace seems to just keep adding new content providers, this time bringing MGM and Disney-ABC Television Group to the fold. Conspicuous in that bothare exclusive Blu-ray supporters, Xbox 360 owners will -- later this month -- have access to ABC hits like Lost, Grey's Anatomy and Desperate Housewives in HD the day after they air. So far, MGM's announced just classic and catalog flicks like the Rocky series and The Usual Suspects, with "most" available in HD. Still looking for a Blu-ray add-on or built in HD DVD?

We can't say that we're shocked to hear this -- you know, considering just how long those Xbox Live holiday blues went on -- but Microsoft is indeed being slapped with a class action lawsuit over the aforementioned outages. Reportedly, a trio of angered Texans are alleging that Microsoft didn't abide by its own contract when network issues disallowed a good chunk of Live users from getting their fix over the past few weeks. According to the complaint, MSFT understood that the time of year would lead to increased activity, yet "failed to provide adequate access and service to Xbox Live and its subscribers." Of course, we're betting the Redmond-based lawyers point out that clause about not guaranteeing any minimum level of service, but who knows, maybe we'll all end up with two shiny new Arcade titles.

[Thanks, Andre and Ben]

The obvious answer as to why Xbox Live has been up and down (but mostly down) over the last couple of weeks is, of course, that the service has undergone a massive distributed denial of service attack. (Feel free to blame the illusory Sony / Nintendo fanboys, if you must.) Naturally, we're already starting to see some of those rumors catch hold, in no small part due to the fact that while GM of Xbox Live Marc Whitten did offer a free game for peoples' trouble in his public memo a few hours ago, he didn't speak to the cause of the outages. We did, however, get some conclusive inside information from a trusted source, and confidently relay to curious Live users that the issues were not at all related to a malicious attack. Yeah, we know, it tones down the drama quite a bit (and actually makes the Xbox team look a little worse than if they were attacked), but the speculation that the service was out due to a two week long internet assault? The stuff of myth.

Looks like Microsoft is going to do the right thing: as anticipated, Xbox Live General Manager Marc Whitten states in a letter to customers that, as recompense for nearly two weeks of outages, the group is offering up a full, free Xbox Live Arcade title free of charge. Sounds like it won't be until the next couple of weeks before the offer is active, but it will indeed apply to "all" Xbox Live members, and assuming it's for games worth more than 200 Microsoft points, it will be net positive for Gold users who lost about $1.64 worth of Live service over the last twelve days. Well done Microsoft, we think most will consider the stinging pain eased. Memo posted after the break.

Update: Confirmed by our pal Major Nelson -- it's Gold AND Silver members. If you have an Xbox Live account, Microsoft just gave you a free game.

To all those who've been tipping us like crazy about Xbox Live going back down again: yeah, we heard, and we know you're not happy. If you're having problems (or even if you're not), feel free to let us know in comments. Almost two weeks of outages, yeesh.

To all those sick of hearing about Xbox Live being up and down: feel free to stop reading here, there will be another news story along in a few minutes. But do remember that Xbox Live is possibly the most widely used paid gaming service in the world, so forgive us for keeping close tabs on this story. Mwah!

Not that we'd put it past Microsoft or anything, but we can already smell a rumor brewing where there is probably none regarding the long-speculated and continuously denied plans to integrate an HD DVD drive into the Xbox 360. Granted, Bill's got to have something to talk about on stage at CES next week, but we're not putting much stock in the pure speculation of a fresh Seattle Times piece, which, without sources, simply holds that "Microsoft could also make a splash by announcing plans to give the Xbox 360 an internal HD-DVD drive". Yep, they could do that which has been speculated endlessly since the HD DVD drive itself was announced in 2006 -- or not. Guess we'll find out for sure next week. Just don't get your hopes up.

Oh, and those Xbox Live outages we've been covering? Rumor has it that Microsoft is going to do right by its customers and hook up Gold members with a little something -- at least according to an unnamed Xbox insider. Guess we'll see about that too one once things stabilize on the Live front.

Read - Xbox 360 to get [Via Joystiq]
Read - Live users to get a little something for the downtime? [Via Joystiq]

We're well aware the first three words on the Xbox Live service status box are "up and running," but those issues are continuing to persist, and if our flooded tip jar and the Xbox Live forums are anything to go by, they're probably not just "intermittent". If you're (still) seeing issues, as always feel free to shout it out, as well as hit our poll so we can keep track of just how severe this stuff is. (So far, of those polled who've been trying to use Live, roughly 75% responded that they've been experiencing moderate to severe issues.)

[Thanks to everyone who sent this in]

Update: Status now reads "up and running," zero caveats. Let's hope that's the way things stay! Thanks, xboxman.

It's been ten days since we started tracking The Great Xbox Live Outage of Late 2007 -- ten days that the team at Microsoft has spent working 24/7, apparently unable to quash the issues affecting untold thousands (or millions) of users. Things were supposedly looking better until earlier today when they apparently got worse again, resulting in Xbox Live's service status box making a decisive turn towards the apology side of the spectrum. Granted, the whole thing may seem a little gratuitous at this point, especially considering that the issues are still tagged as intermittent -- but at least our informal polling at Engadget HQ has improved, with some of us even able to get on and play a game (slow and sticky though it may be).

We suggest everyone get a little extra drunk tonight on behalf of all those at the Xbox NOC who will be ringing in the new year sitting at terminals so we can have our precious Live service back.

[Thanks to everyone who sent this in]

We know customer support reps have a lot on their plates -- especially those responsible for answer the queries of 13-year-old Halo mavens protesting supposed hackers stealing all their kills -- but it looks like the Xbox Live support staff is dropping the ball on this particular issue. Pro gamer Skyllus vBi, a member of pro gaming group Team vBi, was awarded some super-rare "Recon Armor" by Bungie staff a few months ago for his entertaining method of suicide depicted in a popular online video. Naturally, his account became an immediate target for hackers, and they didn't have much trouble swiping his info. Turns out there's a bit of a flaw in the phone support system that allows a hacker to use social engineering to sweet talk account details out of a customer support rep without much hassle. Skyllus has had this particular attack performed on his account three times so far, and is having a bear of a time working it out with Xbox Live support staff. Not only is his precious armor in jeopardy from attacks like this, but all the credit card info and other personal details stored on a Xbox Live / Windows Live account. Stir in some of the login and account retrieval woes that many users have been experience of late and you've got a recipe for some much-needed intervention over in Redmond.

[Via Joystiq; thanks to everyone who sent this in]

We're nearly nauseous from all the spinning on the Xbox Live carousel. One minute we're in, the next we're out. Now, Microsoft is confirming that the issues are back via Xbox.com, and as if that weren't enough in and of itself, the outfit is also informing Zune owners that they "may experience intermittent issues logging onto Zune Marketplace." From what we can tell, there's no definitive ETA on a resolution that will actually stick for more than ten minutes, but if we were you, we'd lock down that Hotmail account, pronto.

[Thanks, Robert S. and everyone who sent this in]
Read - Xbox.com Support
Read - Zune.net Support