I see a few people mentioning features here and there, but ultimately you're not paying for features.  You get almost all the features of Live with a Silver account.

Ultimately, you're paying for online play. 

I have two problems with this concept:

1. It's unfair to consumers.

The majority of 360 games with online multiplayer use a P2P model, in which whoever hosts the game sets up their 360 as a temporary server, and all data for the game is sent back and forth between his and the other players' 360s.  To play a game you've already paid for online, you are using hardware that you've already paid for as a host and bandwidth that you've already been charged for to send and recieve data.  Even for games that use dedicated servers, server-related costs are handled by EA or whomever, not Microsoft.

2. It's unfair to developers.

Imagine you're a developer, and you just finished working on a game with a lengthy singleplayer and robust multiplayer modes.  Anybody who buys your game on PS3 or Steam can access all of the content from that game immediately.  As it should be, since they paid for it.  Paid you for it.  On 360, however, they would only be able to access a part of that game unless they're paying for Gold.  Microsoft is holding parts of other companies' products hostage to get people to pay for Live.

---

Now one could argue that it costs Microsoft money to organize and track a peron's achivements and friends lists, as well as facilitate communication between said friends, and thus they have a right to charge to cover these costs.   I would agree in theory, but this is not what you're actually paying for.  These features are available to all for free through Silver.  You are paying for the "right" to play online. 

Is Xbox Live worth it?  Is a gold nugget worth it?  If you were on an island and all you had was a gold bar, what would it be worth?  A cheeseburger?  If you had an original copy of Amazing Fantasy #15 (first Appearance of Spider-Man) and it was valued at $500,000 but you could only sell it for $3,000 then what is it worth?  It's worth what people are willing to pay for it.  Millions of people (myself included) are willing to pay $40-$60 a month for Live so apparently, we think it's worth it.  I've already given more than one features list in this thread.  If those don't do it for you, then there are other, cheaper, options.

Now somebody said that charging a users for Xbox Live isn't very customer friendly.  My mind exploded.  What!?  This isn't a charity.  It's a business.  Do you think that the PSN is free because Sony loves each and every one of you?  The PSN is free because that was a feature that Sony could boast over the 360.  It does what it needs to do and people appreciate it.  So I have phone lines that run to my house.  I have to "pay to unlock phone service".  Does the phone company say "Oh, the phone lines are there.  We should let d21lewis use the phone for free!"  No.  There job is to provide a service that makes them money.  Somebody has to maintain those lines.  Somebody has to make the service work.  That costs money.  Now I definitely have other options.  Cell phones, pay phones (if I could find one), smoke signals, etc.  but I have to pay for a house phone.  That's the way it works.

Go back to the days of the Xbox.  I didn't buy an Xbox.  The games didn't appeal to me.  The controller didn't feel right in my hand.  You had to buy a remote for it to even play DVDs.  The thing looked horrible.  Microsoft sold that console at a loss (about $100 a system if memory serves).  Were they being kind to gamers then?  And in those days, Xbox Live cost about $50 a year.  Look at the transition from those days to now.  The service has grown and grown to encompass more and more and the cost (until earlier this year) stayed the same despite tons and tons of improvements.  I'm still not sure if MS is making a profit on games.  The BILLION dollars spent trying to fix the RRoD and the costs of R&D, maintaining and improving the service, and other variables must cost a ton.  Xbox Live is a service that is generally accepted as the best and the consumers apparently don't mind paying for such a service.  What makes it better?  Like I said, I've already posted two lists.  Why do some of you not want Microsoft to make money?  Because Sony tried (and regrets, I'm sure) providing it for free?  Because the infrastructure of PC gaming is different?

At the end of the day, it's business.  It's $60 a year.  It's $5 a month.  After I finish this post, I'm about to go spend that much money for dinner.  One meal that will probably last about 45 minutes.  It's not that big a deal.  Depending on what you want out of it, Xbox Live is either a little better or a LOT better than its direct competition's online.  And that's all I have.  Later, dudes.

They dont throw a headset in every console. In fact I think those are opnly special bundles. Live doesn't cost $80 either

I see a few people mentioning features here and there, but ultimately you're not paying for features.  You get almost all the features of Live with a Silver account.

Ultimately, you're paying for online play. 

I have two problems with this concept:

1. It's unfair to consumers.

The majority of 360 games with online multiplayer use a P2P model, in which whoever hosts the game sets up their 360 as a temporary server, and all data for the game is sent back and forth between his and the other players' 360s.  To play a game you've already paid for online, you are using hardware that you've already paid for as a host and bandwidth that you've already been charged for to send and recieve data.  Even for games that use dedicated servers, server-related costs are handled by EA or whomever, not Microsoft.

2. It's unfair to developers.

Imagine you're a developer, and you just finished working on a game with a lengthy singleplayer and robust multiplayer modes.  Anybody who buys your game on PS3 or Steam can access all of the content from that game immediately.  As it should be, since they paid for it.  Paid you for it.  On 360, however, they would only be able to access a part of that game unless they're paying for Gold.  Microsoft is holding parts of other companies' products hostage to get people to pay for Live.

---

Now one could argue that it costs Microsoft money to organize and track a peron's achivements and friends lists, as well as facilitate communication between said friends, and thus they have a right to charge to cover these costs.   I would agree in theory, but this is not what you're actually paying for.  These features are available to all for free through Silver.  You are paying for the "right" to play online. 

Ok, you can argue a point about the likes of large commercial titles, that sell at the the likes of Game Stop, but how many PS3 downloadable games have demos for them, unless you go plus?  Could I, for example, get a demo for Super Star Dust, or the Quest for Booty?  Was there a demo for Gran Turismo Prologue?  Maybe I am missing something, but I know I would of downloaded a bunch more content to try if it were available.

The thing on the 360 is that about everything gets a demo for it.   My understanding is that Sony charges people who produce content a fee for how much their content is downloaded.  There is a reason they went with Plus, and that was to pay for the bandwidth involved with the downloading of content.

Is Xbox Live worth it?  Is a gold nugget worth it?  If you were on an island and all you had was a gold bar, what would it be worth?  A cheeseburger?  If you had an original copy of Amazing Fantasy #15 (first Appearance of Spider-Man) and it was valued at $500,000 but you could only sell it for $3,000 then what is it worth?  It's worth what people are willing to pay for it.  Millions of people (myself included) are willing to pay $40-$60 a month for Live so apparently, we think it's worth it.  I've already given more than one features list in this thread.  If those don't do it for you, then there are other, cheaper, options.

Now somebody said that charging a users for Xbox Live isn't very customer friendly.  My mind exploded.  What!?  This isn't a charity.  It's a business.  Do you think that the PSN is free because Sony loves each and every one of you?  The PSN is free because that was a feature that Sony could boast over the 360.  It does what it needs to do and people appreciate it.  So I have phone lines that run to my house.  I have to "pay to unlock phone service".  Does the phone company say "Oh, the phone lines are there.  We should let d21lewis use the phone for free!"  No.  There job is to provide a service that makes them money.  Somebody has to maintain those lines.  Somebody has to make the service work.  That costs money.  Now I definitely have other options.  Cell phones, pay phones (if I could find one), smoke signals, etc.  but I have to pay for a house phone.  That's the way it works.

Go back to the days of the Xbox.  I didn't buy an Xbox.  The games didn't appeal to me.  The controller didn't feel right in my hand.  You had to buy a remote for it to even play DVDs.  The thing looked horrible.  Microsoft sold that console at a loss (about $100 a system if memory serves).  Were they being kind to gamers then?  And in those days, Xbox Live cost about $50 a year.  Look at the transition from those days to now.  The service has grown and grown to encompass more and more and the cost (until earlier this year) stayed the same despite tons and tons of improvements.  I'm still not sure if MS is making a profit on games.  The BILLION dollars spent trying to fix the RRoD and the costs of R&D, maintaining and improving the service, and other variables must cost a ton.  Xbox Live is a service that is generally accepted as the best and the consumers apparently don't mind paying for such a service.  What makes it better?  Like I said, I've already posted two lists.  Why do some of you not want Microsoft to make money?  Because Sony tried (and regrets, I'm sure) providing it for free?  Because the infrastructure of PC gaming is different?

At the end of the day, it's business.  It's $60 a year.  It's $5 a month.  After I finish this post, I'm about to go spend that much money for dinner.  One meal that will probably last about 45 minutes.  It's not that big a deal.  Depending on what you want out of it, Xbox Live is either a little better or a LOT better than its direct competition's online.  And that's all I have.  Later, dudes.

I think this pretty much sums up my feelings on the topic. Good post!

I thought people paid the sub because it had dedicated servers?