The idea is that ten people in your family group can all share your games. Think of it like a loaning system, but you're not loaning anyone a phyiscal product. If you're in my family group, you can play my games, and vice versa.
“I think the policy makes sense,” Spencer said. “It’s not ten different people all playing the game concurrently, but when you think about a real usage scenario, and we thought about it around a family, and I know certain people will create a family group of people that aren’t all part of the same family, and I do think that’s an advantage, and people will use that. I saw it on NeoGAF instantly, the Xbox Family creation threads, where people said 'Hey be a part of my family.'”
“No birth certificates will need to be sent in!” Spencer said when I asked if the service required a blood test. “I do think that’s an advantage of the ecosystem that we have.”
So that answers one question: Microsoft doesn't seem to care whether or not the ten people in the group are actually family members. They can be friends, roommates, boyfriends, girlfriends, your dog's groomer… you pick ten people, and you share games with them.
The question is how many people can play the game at the same time. Spencer told me he believed that two people can play one copy of a game concurrently, but he urged me to check Microsoft's official wording on the matter to be sure.
