I wanted to let you know that on April 15, 2010 Microsoft will discontinue Xbox LIVE service for original Xbox consoles and games, including Xbox 1 games playable on Xbox 360. Our first step in this process will be to turn off auto-renewals for those members who only use Xbox LIVE on a v1 Xbox. While I can’t comment on the specifics, this change will allow us to continue evolving the LIVE service with new features and experiences that fully harness the power of Xbox 360 and the Xbox LIVE community. We did not make this decision lightly, but after careful consideration and review we realize that this decision will allow us unprecedented flexibility for future features.
Xbox LIVE general manager Marc Whitten (Gamertag Notwen) has posted this letter to the community which provides additional context.
The best is yet to come, and we look forward to sharing more details in the near future.