Kim Dotcom offered the Lizard Squad "thousands" of free, lifetime accounts to his MegaUpload file storage service, which they accepted. The hackers had taken down Xbox Live and the PlayStation Network (PSN). Reuters

Kim Dotcom did his best to save Christmas for thousands of Xbox Live and PlayStation Network (PSN) users, by offering free lifetime accounts to his MegaUpload service to Lizard Squad, the group of hackers taking credit for the hack. Microsoft Corp.’s gaming service is largely back online, Sony’s still appears to be reeling from the attack.

The private networks, used by owners of the Xbox One and PlayStation 4 game consoles, both went down on Christmas day. Dotcom said that he offered the peace treaty to Lizard Squad because he wanted to play “Destiny” on Xbox Live. Gamers are able to sign in and play games online, but unable to make purchases on the service or join a friend's game.

Update: Sony says that PSN is slowly coming back online, but some users are still reporting sign-in issues. Xbox Live is back, with the exception of three apps: IGN, Maxim and MLG.TV for Xbox One.

The Lizard Squad is a group of hackers that has hit Sony’s PSN in the past, and once claimed to have left the ISIS flag on its servers. The hacking collective also once called in a bomb threat that grounded a Sony executive’s plane. The group purportedly told WinBeta that its efforts were meant to force Microsoft and Sony to upgrade their networks.

“Lizard Squad noted that they could take down NASDAQ if they wanted to damage the economy, but stated that it was not their goal,” a member told the site. “They jokingly refer to themselves as terrorists, but do not feel they are on that level of notorious mischief.”

Dotcom said he would cancel the accounts should Lizard Squad resume its attacks on Xbox Live and PSN. The group claimed that it had stopped the attacks thanks to Dotcom’s offer, but that Sony’s network remained down because it had not yet been able to recover from the hack.