The gaming giant has been ordered to restore the Xbox account with all games and pay $400 in damages.

Microsoft is facing fresh criticism after a Brazilian court ruled in favor of an Xbox player who lost access to his account and entire digital game library after it was hacked. According to the lawsuit, Microsoft confirmed the account had been compromised but told the player to create a new account and repurchase his games instead of restoring access. A Brazilian court has now ordered Microsoft to restore the original account and its digital purchases, while also paying the player $400 in damages.

The case has sparked renewed discussion around digital game ownership, with many players arguing that losing access to an account can effectively erase years of purchased content. The ruling is being viewed by some as an important consumer rights victory, particularly as the gaming industry continues its shift toward digital storefronts and away from physical media.

The lawsuit comes during an especially difficult period for Microsoft’s gaming division. Earlier this month, Xbox announced its largest restructuring to date, with plans to eliminate approximately 3,200 positions during fiscal year 2027, including around 1,600 layoffs immediately, while also moving four Xbox studios to new management. The company said the cuts are part of a broader effort to improve the health of the Xbox business, but the decision has drawn widespread backlash from employees and fans.

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