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I would just like to dispel a few misnomers going around.

360 games can use dedicated servers. Forza 3 does. L4D does.

360 games can have consumer hosted servers. It is called XServer. Section 8 allows this.

360 games can have user generated content. Forza games do, Halo 3 does.

There has been free DLC. Forza had some, Burnout had some, L4D had some.

And yes, this developer was speaking about the services MS provides for online functionality.