Microsoft has just come out (get it!?) with a pretty major change in the naming rules on Xbox Live – subscribers are now allowed, within certain guidelines, to declare their sexual orientation in their gamertag.

From the Live Code of Conduct:

“You may use the following terms to express your relationship orientation in your profile or Gamertag:

• Lesbian
• Gay
• Bi
• Transgender
• Straight

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.”

This is pretty amazing news, especially for those in the gay community that were concerned about Microsoft’s history of banning gamers that identified themselves as gay in their gamertags (though to be fair, Microsoft did state that they didn’t allow sexual orientation of any kind to be referenced in a name).

I’m sort of shocked it was this long in the making – according to most of the thirteen-year-old kids I meet on Modern Warfare 2, the majority of the Live community is gay.

Check out the full story at PC World for all the details.