Okay, if you’re a PC gamer, you’re familiar with this stuff. Mod or modding (verb) is a short term for modification. It describes altered versions of a published video game.
New York Times wrote that Microsoft is now allowing players of Xbox to create mod that will run on their consoles. The article says:
Today the company is expected to announce the fall release of a product called XNA Game Studio Express, a basic version of the company’s game authoring tools that will let aspiring designers write games on a PC and test them on an ordinary Xbox 360. (To test games, the designer pays $99 a year to translate the game from the PC into the Xbox format.)