Microsoft have made some minor changes to their Code of Conduct in regards to their Xbox Live service. The old Code of Conduct didn't allow users to define themselves as straight, gay, lesbian, transgender or bisexual. Which put Microsoft in hot water last year. That has now changed, and everyone is allowed to "proclaim" their sexuality in their gamer tag.
Stephen Toulouse, director of policy and enforcement for Xbox Live also stated that "Other terms regarding relationship orientation are not allowed. In addition you may not use these terms or any other terms regarding relationship orientation to insult, harass, or any other pejorative use against other users." he also went on to thank the Gay & Lesbian Alliance Against Defamation for helping out with the changes made.
This is a great move from Microsoft as it will let people be who they are, and at the same time crack down on defamation of character which happens in all online games on the Live service.