We all thought the worst was over after the Marketplace outage yesterday with scheduled maintenance, but now it seems Xbox Live is having an issue on multiple WP7 devices with backend Windows Live services. If you head on into the Xbox Live hub and await for the automatic update process to start, you should be left with a forever hanging "Updating..." at the top.

Both myself (Omnia 7) and our Daniel Rubino (Focus) have reproduced the error so it looks like it's not directly affecting a single location and multiple Live profiles are confirmed to be affected. Hopefully Microsoft will get the system back up to speed. For the time being they have stated on Twitter that "It’s a new issue that users are unable to access Xbox LIVE features at this time." Are you experiencing this issue?

via: WinRumors

Update: We've just had news (and have confirmed) that the Xbox service on WP7 is now back online. Thanks ash755 for the heads up!