Xbox Live Gold is not good value, and it is holding the 360 back

[NJ5]

Why Xbox Live Gold is not good value:

What are you really getting for 50 € a year? Microsoft doesn't provide dedicated servers for most or all games you can play online. So that's not what you're paying for. Instead, games are hosted by one of the players, with Microsoft's servers just providing the service of connecting you to other available players. But this matchmaking service is trivial to implement, requiring at most a few servers per game, as it's only invoked when starting up a match.

So what are you paying for, really, when you spend the 50 € a year? Certainly not for the privilege of all the online content, as Silver users can also access it, and the servers hosting this online content should be paid for from the money you pay for the content. Serving files online is very cheap, less than $0.1 per GB in fact. Free demos can be considered a part of marketing done for publishers on behalf of Microsoft. Given how cheap it is, it should be more than covered by royalties that MS charges publishers.

So in conclusion, Microsoft is not charging you for Live Gold because it has to. The minimal services provided by their system are either cheap to provide or should be funded by other sources. They're charging you because they can.

But can they? That's my second point... I believe a large part of why the PS3 is outselling the 360 is due to having free online. Yeah, the PS3 is around $100 more expensive than the 360, but after two years of paying for Live Gold the 360 will have cost the same, and more if you keep playing for 3 years or more. In this economy, who doesn't expect their new console to last for more than 2 years?

For me, it doesn't affect me much as I prefer to do my online gaming on the PC which is all around better, with the biggest advantage being that you're actually playing on a dedicated server which allows for a bigger number of players with less lag and more fairness among players. I bought the 360 for its single-player games.

But if in the next gen I do want a console to play online, I will certainly not go with the one that charges me for it, without giving me corresponding service back. As much as I dislike Sony, in that situation I might actually consider buying their system. I suspect many people are thinking that right now, which is why the 360 can't compete against the PS3 properly at the current prices.