My understanding was that games you already owned would continue to work but you might not be able to add more to your account until you returned home. Regardless, that is more than a trifle ridiculous.
As with much of the messaging for the Xbox One, there's been conflicting information. Some are saying that all you'll need is an internet connection, others are saying that you'll need to be in one of the 21 supported countries to access Xbox Live for account verification. The former makes much more sense, but MS haven't been a paragon of sensibility of late.
There's also the suggestion that there'll be region blocking even between supported countries in the EU, with MS support staff revealing that the UK is considered a separate region from mainland Europe. What that means for Ireland, I don't know. We're usually lumped in with the UK for geographic and cultural reasons, but maybe the UK is separate because of their currency? Either way, if that story is true we'll either be unable to import working discs from mainland Europe or from the UK, and while I don't know enough to say whether or not that's legal, it certainly is against the spirit of the single European market.
Meanwhile Nintendo keeps printing money and laughs at the idiots fighting each other. Sure the Wii U isn't a big success right now but Nintendo never makes a loss and they had slow starts before, they're fine.
Nintendo have actually been reporting losses for the last two years, so they're not looking too healthy right now. They'll live, most likely, but they're certainly not rolling in money like they were back during the days of the Wii hype.