"We are actively working on an update that will allow you to link your Gamertag to a new Windows Live ID if it becomes dormant," said Microsoft in a statement to Shacknews.

"An Xbox LIVE Gamertag is unrecoverable from the system only when the associated Windows Live ID has become dormant and the Gamertag has been deleted from all Xbox 360 consoles," the company explained. That means those already hit by the issue can recover their old accounts and achievements, so long as they haven't been deleted.

Previously, Microsoft indicated that those affected could not recover their old accounts, and would have to make an entirely new account if they wished to play games online.