I don't believe Microsoft will ever make online gaming free.  The cost of providing such services is just too much, especially with the redundant architecture that Microsoft has built up.

So the question is, what would Microsoft have to include in an annual subscription to make an Xbox LIVE Gold membership an unquestionable value?

• Subscription to (1) premium service (Netflix, Hulu, etc)? 
• Unlimited Xbox LIVE Music streaming (Xbox Music Pass required for additional features)?
• 10 Free Skype Minutes per month (requires Kinect)?
• Free access to Xbox TV base service, including channel guide (Xbox TV premium service required for DVR functionality and access to premium channels)?
• Available across all Xbox LIVE connected devices?

 

It already is.

The fact that someone decides to give away something almost similar for free is irrelevant.

Don't value it? Then don't pay for it. Simple.

I think its a good value as it is. XBL is a great service for the money and they don't need to add anything to keep me paying for my subscription.

kowenicki said: It already is.

This.

kowenicki said: It already is. The fact that someone decides to give away something almost similar for free is irrelevant. Don't value it? Then don't pay for it. Simple.

Done. And here in lies the issue. Competition is never irrelevant.

I'm not sure what they could add, most likely their TV like service we keep hearing rumors about. Will that be included with the current subscription at its current fee or are they going to create another tier?

Years down the road cloud streaming will probably be a thing, but I know you are talking near future, most likely next gen 2013/2014 future.

kowenicki said: It already is. The fact that someone decides to give away something almost similar for free is irrelevant. Don't value it? Then don't pay for it. Simple.

It is unquestionable because if you want to go online you have no choice but to pay the fee. This fact alone means most people need to justify paying for a service that is needed to get 100% out of the product. 

Microsoft are on to a winner here. 

It's already a justified cost I guess, but to give it the same value as PSN or Steam it would need to offer a few PS+-like benefits or 2 of your suggestions.

edit: Well to be clear, it is a questionable cost but obviously is justified to millions. 

The reasons the fans show to justify the Live's price are lame. Some say it is for friends, for avatars, cross game chat etc etc. The thing is PSN is the same thing without any cost. I think Microsoft will lose many potential buyers next gen because of this.

There is not really much that they could do that would make it worth the £40 in my opinion. I just want them to lower the price, £15 or £20 a year would be more reasonable.