Now, in a contradiction to the story yesterday which said that Xbox Support said that an Xbox Live ban removed access to your downloaded games, Major Nelson has said there is nothing to worry about. Although… As these are tied to your Xbox Live account, you do give up multiplayer access. Your account is banned, and your games are tied to your account. You can’t just set up a new account and pop in the DVD and play multiplayer again. So, I still hope they can offer some kind of retraction when it comes to bans that were not intended (rare, but it’s happened).
Major Nelson is usually the end-all when it comes to rumors. If he says it, it’s true.
Major Nelson, in a Reddit video interview, contradicted Xbox Support, stating, "Absolutely not, you will always have access to the games you purchase. Absolutely not." According to him, you only have to worry about losing multiplayer features through an Xbox Live ban.