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i dunno about outright illegal but with their very pro-consumer court system i'll bet if a class action lawsuit were to come from the used game policy MS will lose. their policy of restricting who you can sell to and taking a percentage of your resell value is clearly anti-consumer. i don't think consumers could win in the US but i think they could in europe.

i'm thinking no legal issue with kinect could win in the courts unless MS is proved to be doing weird things with the data collected.