Sony's concept of free online and Home up to this point looks to be based on a the good old bait and switch technique. i.e.- let everyone in/give something away for free and then sell all the extras once they get there/ committed to fully enjoying the experience. I like this idea and think if properly implemented, Sony's online and home model will offer a far larger revenue steam than the tradition fee for service model that Microsoft has set up.
On the other hand, the perceived value of something free is definitely less than something you have to pay for, and even if Sony eventually matches or counters the features of Live, they have a lot of mind share to make up for in this area. (market the fact the online and home are free and gamers will come, continue to treat it like another side note on the every growing list of features and they won't.)
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