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I'm not sure Microsoft need to respond.

Home strikes me as Sony's attempt to keep online free.

You need money from somewhere to run online. There's costs involved, and you need some way of covering that cost. Not only that, but as online grows the costs grow (in a sense, that's the beauty of Microsoft's model. It doesn't matter how big it gets it should always pay for itself).

So, Sony's hoping to make money from advertising space in Home and people buying stuff from Home. The problem with this is that it NEEDS to be popular. Advertising only works if there's people seeing it. Selling stuff only works if people are using it.

It'll be interesting to see if it works.