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I don't think there is anything 'wrong' with XBox Live but I do think that Microsoft has failed to preserve its premium status by adding new and meaningful features at a regular basis. What Nintendo is doing with Miiverse should have been something Microsoft added years ago in response to social networking, and it should have been developed into a very mature service by now.

It is one thing to offer a free service that falls behind pay services, but when you're offering a for-pay service you better have a significant reason why people are going to pay for something that they could otherwise get for free.