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how about this: before A can lend a digital copy to B, A must turn on his internet connection and tell MS's server that he is now lending to B.

B can now download A's game to play.

A cannot play his physical copy until B returns the copy back to the server (some state must be kept in A's console to remember this).

if B's connection goes down for more than some period (could less or more than 24hr, configurable by A), his copy is automatically relinquished.

does this solve the "only single active copy" issue?

How does that not happen with their old system? You buy a disc, install it, remove the disc (doesn't need to go back in) and then give it to someone else?

You need the disc in the tray to play games installed to the hard drive (that weren't digital downloads).

> Now you have two people playing the same game at the same time with only one copy of the game bought.

And?