Why Xbox Live Gold is not good value:

What are you really getting for 50 € a year? Microsoft doesn't provide dedicated servers for most or all games you can play online. So that's not what you're paying for. Instead, games are hosted by one of the players, with Microsoft's servers just providing the service of connecting you to other available players. But this matchmaking service is trivial to implement, requiring at most a few servers per game, as it's only invoked when starting up a match.

So what are you paying for, really, when you spend the 50 € a year? Certainly not for the privilege of all the online content, as Silver users can also access it, and the servers hosting this online content should be paid for from the money you pay for the content. Serving files online is very cheap, less than $0.1 per GB in fact. Free demos can be considered a part of marketing done for publishers on behalf of Microsoft. Given how cheap it is, it should be more than covered by royalties that MS charges publishers.

So in conclusion, Microsoft is not charging you for Live Gold because it has to. The minimal services provided by their system are either cheap to provide or should be funded by other sources. They're charging you because they can.

But can they? That's my second point... I believe a large part of why the PS3 is outselling the 360 is due to having free online. Yeah, the PS3 is around $100 more expensive than the 360, but after two years of paying for Live Gold the 360 will have cost the same, and more if you keep playing for 3 years or more. In this economy, who doesn't expect their new console to last for more than 2 years?

For me, it doesn't affect me much as I prefer to do my online gaming on the PC which is all around better, with the biggest advantage being that you're actually playing on a dedicated server which allows for a bigger number of players with less lag and more fairness among players. I bought the 360 for its single-player games.

But if in the next gen I do want a console to play online, I will certainly not go with the one that charges me for it, without giving me corresponding service back. As much as I dislike Sony, in that situation I might actually consider buying their system. I suspect many people are thinking that right now, which is why the 360 can't compete against the PS3 properly at the current prices.

i dont think its really holding M$ back. Because you dont have to pay for it if you dont want to. Most of the people who buy xbox live buy a hard drive anyways so the PS3 really isnt any cheaper than the 360 for these kind of people and these people are probably going to buy an xbox anyways.

Do i wish xbox live was free? Yes but i dont think its really holding them back too much.

360 can be modified so i think the pirates are holding M$ back.

I'm sure some people didn't buy the console because of the fee. However I think its more then made up for by the extra revenue generated by the gold membership.

You.... probably have a point.

I am somewhat embarrassed to admit that when I got my 360 I used Live almost exclusively for playing Gears 2 co-op online with my little brother, and when my subscription ran out I just never saw justification for renewing it. I mean, there's no doubt that I'd use it if it were free, but it isn't so I don't.

I know it's not entirely rational, since I spend considerably more than fifty bucks a year on games and I could justify getting Gold if I drew up a list, but it doesn't feel worthwhile.

Tell me about it. took me 4 years to figure that out. I had xboxLive since the original Xbox Im not anymore so that was a long time.....

heard this time and time again,not gonna change much,obviously those people want to pay that much for internet so let them

What you are spending money on is Online gaming, period. If software based online gaming would be free, there would be very few Gold subscribers. And thats that.

I highly doubt that people would feel the need to go Gold just to gain access to Netflix and Facebook. So it all comes down to Multiplayer imo.

And thats a more interesting question, how can MS be allowed to charge customers for something that is free and always has been free on other platforms. Atleast in the current state of Gold membership. But MS is obviously trying to add value to Gold, so at some point they Pros will outwheigh the Cons. But atm, its all about online gaming.

Maybe a little bit in sales. I know that i got the ps3 over the 360 just for the free online.

TBH, people who pay for LIVE are stupid, and they are actually contributing to paid online gaming being acceptable. That's right, if paid online gaming becomes a standard in the future, you all know where to turn, MS and their brainless Gold subscribers...
What MS actually does is "stealing" half of every game you buy for your 360. You pay EA for their game, but you will have to pay MS as well to play half of it. You have to pay MS for playing games which have absolutely nothing to do with them (besides being on the 360, which MS should be thankful for, not charge extra). I can't believe how this practice became accepted. MS is giving you all a golden shower, and apparently you're all sitting there with your mouths wide open and loving the action...

Thank you all for contributing to a more expensive and customer-exploitive gaming environment. You're doing a great job...