First off I agree with a number of your points. Services offered by Facebook, Google, and Live are very different in their functionalities and how they do business. That much is obvious. My argument there was not to say they are the same, but that a service like ONLINE GAMING should be free if other companies can allow free access to their services and STILL make a profit. If you want to counter by saying Microsoft is justified because charging for ONLINE helps MAXIMIZE their profits, then every service out there, including Facebook and Youtube and other services should also charge a small fee in order to maximize THEIR profits too right? Arguing against this would simply be saying Microsoft is somehow more privileged and other companies are exempt. Ads and commercial breaks are not the only way Microsoft can make money. Sites like Facebook do this because it is simple to do and people don't complain since it is still free, yet even for Gold members, ads STILL appear on their dashboard why is that? Why can't Microsoft make profit through other means like I don't know... investing in more game studios and pump out more games? Taking risks should always be more encouraged. Look at any kind of competitive field in our world today and playing the safe side by not investing in things like more game studios shows a lack of trust in your own abilities. This is how companies like Apple got to where they are, by investing in their technology and not by charging to simply use their iTunes or to simply access the AppStore. These things seem fairly obvious they should be free, but the point is there. I'm trying to show that companies need to TRUST their innovations and not necessarily on all the smaller things.  

I also don't have a problem with paying for services that truly DO deserve all the profit they get. However, all those services you listed though are only offered through paid subscriptions. Movie rentals and instant access to TV shows were never free. Internet was never free. But online gaming has been free FOR A LONG TIME now. For those who say fine, stick with Sony and Nintendo or whatever if you want free online and stick with Microsoft if you don't mind subscription based online. But if you've noticed, people are already speculating subscription based online might be the norm now since Microsoft proved it to be "so successful." Repeating what I said before, there are many other ways to make a profit; one big way is to continually innovate. Where do I get free online then if every company decided to follow this? The argument is invalid because they are assuming this won't affect future generations. So again with my Facebook analogy, since social networking sites have been free basically forever, would you want them to starting making subscriptions a normal thing for access to sites like Facebook? Something erroneous like "they make more profit this way" would not satisfy consumers, and neither should Microsoft forcing fees for online gaming. I'm not whining, but the fact of the matter is I've always had online gaming for free and if companies make subscription based gaming a reality, it will be easy to point fingers at Microsoft. You might then say it's not Microsoft's fault that other companies can't make a profit. Well my point is Microsoft is not being creative enough in how they make a profit if they NEED to charge for online. Ever since Apple revolutionized the tech industry, every company has struggled to figure out how they can compete and are resorting to cheap methods for making a profit instead of thinking outside the box and innovating. They are basically only thinking in short terms instead of longevity for the future. A lot of companies are at fault for this, Sony included. And please, do you really think Sony is losing BILLIONS because of solely their Playstation Division?? No, they lack innovation in many of their OTHER divisions and they should not RESORT to something like charging for online. Since Microsoft is not as successful as Apple, does that give them the right to do whatever they want? Microsoft charging for online simply tells me they don't want to innovate and will use any means to make money. Instead they should send the message that they are here to stay and to keep being a respectful company, no matter how bad things seem. I am willing to bet Microsoft will drop out of the gaming industry if their losses were like Sony's. Yet Sony seems willing to stay despite their losses, they even are making dedicated handhelds still along with Nintendo despite its losses as well. Everyone keeps saying there is no room for dedicated handshelds anymore but they are still pushing it. And online is still free on them. Where is Microsoft's handheld? Oh right, they are only interested in profit. Nothing more. Sony and Nintendo are heavily interested in profit too. But why are they still making handhelds? Every media outlet in the world still say they are doomed. This mentality of offering what consumers DESERVE should be encouraged by us as gamers instead of the other way around, where we are encouraging what companies deserve, otherwise they are going to keep sapping us out of our money and not innovate and we DEFINITELY deserve to play the games we paid for to its fullest extent. Keep all those extra, nice features on Gold, Microsoft. But give us the ability to play the games WHEN we want, not after we pay you. Again, Nintendo and Sony are NOT saints, much like any other company. But they are getting some things right and the option of free online gaming is one of them. Even if Microsoft is able to pay for the service by the revenue they gain through Xbox Live, they still are not respecting their consumers and desperately need to change their policies that don't just reflect their own interests. I'm not even asking for much AT ALL. Free online gaming is not hard to give in the first place.

PS+ offers additional content on top of the games you already pay for. Many other services also offer ADDITIONAL content through paid subscriptions. Such examples include file sharing websites, like Megaupload which offers faster speeds among other things if you pay. But it's still free to use, albeit limited in functionality. This is very comparable to PS+. But what the hell does Silver offer? You can't use your own internet with Silver when online gaming is not included. Why does Microsoft think they don't need to provide free services to their customers? They paid for the console already. This would be like Netflix charging you before you can turn on your TV. That analogy doesn't fully work since turning on a TV is not a "service." But you get my point. When you point out cable/satellite for TV and calling/texting for phones, I've said it before, those have always been fee based from the start while online gaming has not. You might then say, so what if Microsoft wants to approach their business differently? They can formulate their business however they desire, but not offering, as I said before, DECENT ONLINE for free members shows they are not interested in providing better content and only want what's best for their company, nothing else. Sure, every other company care about themselves also, but at least they understand what should be free and what shouldn't. Facebook is free because they understand that it should be free. You say nothing is truly "free" but how does that add to this discussion? I am merely arguing for FREE ONLINE and how companies should move forward, not something like how our liberties or independence are never truly "free."

Now to respond to some of your other points that I missed, I was merely pointing out Nintendo and Sonys' online because they know what should be free as do many other companies like YouTube and Facebook. If Nintendo and Sony decide to make their services fully subscription based, it's not that they acknowledge that online gaming should be a privilege but they have fallen into Microsoft's trap by thinking short term profit is the way to go. Microsoft probably wants this to happen so people will stop thinking charging for online is wrong. Who can blame Sony and Nintendo when they are losing money as they are? But is that what we want from Microsoft, Nintendo, and Sony? This only spells doom for the gaming industry and if someone powerful as Apple comes along and offers virtually everything superior for free since they have the means to do so, then I can safely say gaming is dead because Apple doesn't know a thing about gaming. But back to my original point, comparing the quality of Nintendo and Sonys' online to Xbox Live's to begin with is an unfair comparison. Live has been around since the first Xbox and if you don't remember, Xbox Live from the beginning was nothing like Xbox Live today. Nintendo at least has online on Wii and is only seriously starting to venture in it now while Sony started an actual online service with the PS3. You should also agree PSN from the start vastly improved to what it is now. That is what I meant by "on par" not that Live and PSN are completely equal but equal in terms of what basic things are being offered. I am almost positive that Sony's online for their next console will be way more robust and I can only hope Nintendo will be able to do the same right out of the gate. For Steam, you also pointed out for Microsoft that it costs money to maintain all those people downloading from their servers. Uhh, isn't that the same thing for Steam? Steam also has free demos too. They host their own betas too. How did Steam grow to what it is today? You point out that Steam makes their profit through other means like the pricing of the games and similar features to Live to make it appealing. But there is a very distinct difference. They respected their customers the whole way. They had a rocky start but they have succeeded by getting this far without charging for simple access. My QUESTION then is, why does Microsoft think online NEEDS to be part of Gold in order for it to be appealing? A lot of people are saying without online, people will stop paying for Live therefore not giving Microsoft the revenue to support their service. These are the people getting confused by what should and shouldn't be free. If Microsoft needed to include online gaming with Gold, doesn't that mean Live really isn't worth it despite all these new features they offer? Why are we blaming ourselves for Microsoft not getting the needed revenue? The real issue is we need to make it clear to them we demand for innovations in new technology instead; this is where Apple was successful. Microsoft can get creative however they want to make a profit, but charging for online is anything BUT creative, same with Online Passes. Apple is successful not because they were thinking solely of profit, but thinking what consumer's demands were at each step of the way. And people like me DEMAND for free online gaming as a required option. Notice I said option; it doesn't mean Microsoft can't offer some insanely good service for Gold for a reasonable price. Thus you can site many innovations from Apple. Microsoft and Sony will eventually be stuck in a rut if all they can think of is how they can extract every penny from their customers and not be in the mindset of innovation instead. If Microsoft made online gaming free, that would be a good first step. Microsoft, Sony, and Nintendo, please think of new and exciting ways to make money and continue to grow as companies. I don't know about you, but Apple's inventions have always intrigued me like the original iPod. Exciting technology and they still make money. It's a win-win for both us and the company.

I hope you read all my words carefully as I have implied a lot of things but tried my best to show everyone the bigger picture. Don't just nitpick little quotes and try to say my entire argument is flawed because of it, usually because they are taken out of context and I did not mean those things. People who say I am just wasting my time and should just let people buy what they want I just want to say this: I am just concerned by where this industry is heading. We have continued to see with this generation how Sony, Microsoft, and Nintendo are trying to stay away from losses by thinking of UNNECCESSARY ways of charging us (Microsoft with fee based online, Sony with online passes, Nintendo with those fees on NES games as you pointed out). I love gaming and have many fond memories of it. I want to see gaming to continue for many, many years and be excited the whole way. I would very much hate to see any companies fail but if they died trying while continually respecting us as consumers then that is even more of a shame. This is the only time I have ever expressed my opinions like this, but I felt like taking the time to get my thoughts out. I've only just joined this forum and already I am speaking my mind lol. I have some free time so why not? I also appreciate that you did not think of my opinions as lesser than yours unlike some other people here, although the naive comment hurt a little lol. I hope people don't tell me "I'm whining" as that is just ignorant and an easy way for them to dismiss my argument.

Microsoft host servers for all online games? Is this true? 

4.  Steam is a store and a store only.  The price for their bandwidth is included in the pricing of their games.  Simiar to Live, their social features, like friends and acheievements, are set up only so that you feel almost obligated to use their retail portal so that they can be a dominant retailer of digital downloads.  You are paying per download in the price of each game versus a subscription fee. 

This is the longest post I've ever seen

You must have used Steam in 2005...

Welcome to 2012, where Steam isn't only a Store but a full blown online service with all the services (plus a few extra) offered by X-box Live and PSN:

http://www.steampowered.com/steamworks/gameservices.php

You can add to that list cloud storage for storing saved games (up to 100mb per game)

Sorry, but the people here seem to think I'm just talking like I have no clue unless I thoroughly express my opinion. There may be other various factors to this debate but hopefully I covered a lot of it. I probably won't ever do that again haha