Microsoft has updated its Products EULA with a clause that gives the company the power to hunt down and disable pirated first-party games or software.
The service agreement for Microsoft products has received an update. Section 7B "Updates to the Services or Software, and Changes to These Terms" reads, "We may automatically check your version of the software and download software updates or configuration changes, including those that prevent you from accessing the Services, playing counterfeit games, or using unauthorized hardware peripheral devices. You may also be required to update the software to continue using the Services."
This is one of the agreements you agree to when installing Windows 10.
While this may suggest Microsoft is able to detect pirated copies of all games, the service terms are only applied to Microsoft-developed software/games. So if you're running pirated copies of games like the upcoming Gears of War: Ultimate Edition or things like Office, the company would be able to detect and disable them.
That being said, the most troubling part of this clause is the "unauthorized hardware peripheral devices". Which doesn't explain exactly what Microsoft would consider "unauthorized". This could be things like modified controllers (intended to gain an unfair advantage) or non-certified PC controllers. The fuzzy wording certainly doesn't help.