I was working at Xbox when we made the same change there. Web analytics were showing a massive drop-off in signup as users struggled to think of a good gamertag

I was working at Xbox when we made the same change there. Web analytics were showing a massive drop-off in signup as users struggled to think of a good gamertag that wasn't already taken. At the time you had to pay to change your gamertag so when we introduced this you got a free change after it had generated one instead.