What makes it special? What makes Xbox Live worth it?

[Reasonable]

Mr Puggsly said:

Reasonable said:

Mr Puggsly said:

An infrastructure like Xbox Live can't be supported on ads a lone.

What do you judge that on?  I'm curious as I've heard this stated before but never seen any proof one way or the other.  I'm not saying it couldn't - but I don't see why it couldn't either, if you see what I mean.  What makes you so sure Live doesn't bring in enough advertising (because it has a lot of it, more than PSN or other similar services so far as I can tell as a 360,PS3,Wii,PC gamer) and what do you think the gap is - i.e. what percentage of costs do you think Ads cover?

I ask because I'm feeling, particularly with the new UI, that I'm seeing more adverts than ever which does cause me to wonder whether the additional fee to the user is really required or not.  It's not very much money as you note, and often you can get it for less - which immediately makes me suspicious as to what the real cost is if the RRP can be so often and easily dropped or wonder whether the increase in ads is to offset the number of people paying less than RRP.

The ads on the 360 dashboard are greatly exagerated. I barely even notice them. What ever revenue they generate, its gotta be a drop in the bucket compared to what the subscriptions bring in.

You're ignoring Xbox Live takes on more than other "similar services." MS operates all the servers and covers all bandwidth fees.
Nintendo doesn't operate all servers and has small download size restrictions.
Sony as well doesn't operate servers and charges publishers bandwidth fees.

MS essentially takes away some of the financial burdens from publishers. I can't imagine they could do that on ad revenue a lone. It would have to be advertisment rape!

So you're guessing?