nah, online doesn"t matter

what matter is the brand : PS3 win
and price : 360 win

Neverthless, the overall appeal of the console depends on the territory

In NA, the PS3 has more grow potential so it is currently winning. Without this growth potential, the fight will be very close ...
In europe, the PS3 has a LOT MORE brand appeal, so it is winning
In Japan, same as europe ...

Conclusion : you have to understand online matter for most of the hardcore gamers but it doesn't for all the guys that plays console with friend (FM3/GT5/PES/FIFA OFFline).
Those people (generally male) are just not interested to play online, dont care about MW2 but love GTA and are at the middle between hardcore and casual gamers : they were the PILLAR of the PS2 and so, the PILLAR of Sony ...

Well I think Xbox Live Gold is truly awesome and a very big cash cow.

There are like 13 million gold subscribers. Everyone ins paying $50 a year (even more since it is 60€ in Europe, thats like 80USD. Other than that, not everybody has a 12 months subscription, there are some 3 months subscriptions which are more expensive for a year)

so 13 million * 50 USD = 650 million USD For MS (there is no developer or publisher that want a piece of the cake, just MS and the retailer if it is bought @ retail)

For 650 million USD you can buy 3,266,331 Xbox 360 Arcade. And that is just for one year. Do you think the Xbox 360 would move like 2,6 million units (250 USD Elite) more every year if live were free? i don't think so.

I will also add that those people wanted to buy a PS3 on day1 but, since they are not hardcore gamers, they dont invest so much money on console and were just not able to pay 600-400$.

This is how u get the +500k numbers for the end of 2009 and this is why u understand that there is still some people, beside the casual, that like classical video games (from SFIV to PES) but are not attracted by the 360 ...

NJ5, I agree with your post completely, MS are basically ripping people off and forcing 360 owners to pay for something that should be free. As you said, if it had dedicated servers for all games, it wouldn't be such an issue. However, I think because a lot of people want to play online, they just shut up and pay, even though its free everywhere else. Don't get me wrond, MS have done a lot to push online gaming on consoles, but the cost is still a rip off.

Another issue is that a lot of online console gamers are unaware as to the advantages of dedicated servers and don't know of the features and advantages PC gamers have been enjoying for free for many years. MS is basically exploiting there ignorance and no-one seems to be educating consumers on what they're missing out on. If people have to pay, they should at least be informed that the service they're paying for can be improved quite drastically.

It's definately had some effect on sales, although probably not as much as it could have as a lot of people don't understand why paying for P2P is a rip off. I opted for the PS3 instead of getting a 360 because I refuse to pay for an inferior online system to the PC where it's free. Also, what about people that mainly play SP and only go online casually? These people are probably put off of getting a 360 for this reason.

I know for a fact that it costs way more than .01 cent to hose a GB of information on a server. The OP is not taking into all consideration factors that are placed into storage.... redundancy, electricity, hvac, integrity etc... that alone shows me that they are uninformed. Amongst other things offered, XBL gold offers is the ability for MS to release dev kits over XNA studios extremely cheaply (tho free for PC...), it allows us great exclusive content possibilities due to increased revenue stream, it allows MS to portray a robust pay-to-play system in which advertisers and developers can both have niches in, thus brining in more money etc.. This additional income flow means that MS is not taking on the costs of servers themselves and they are not taking on all development costs themselves. As a gamer, I feel it is important to support development, and for less than $3/month I find this to be a fantastic investment.

Does anyone honestly think that a profit minded company such as MS would offer free services, free servers, free content, and then still pay developers hundreds of millions for exclusive contents for their online service...?? really?

Oh, and our XBL Gold membership let us actually play MW2 online the day it was released :) that's worth its monthly payment alone.

It may make sense financially for Microsoft, but that can easily change.

I mean both Microsoft and Sony have flawed business models. Sony can't profit, Microsoft can only profit by charging for online. While Sony's situation is more disastrous, Microsoft's can also worsen due to the competition taking the value advantage from them.

I know for me, and plenty of other people, the price is so cheap we just don't care about paying for it. After having suffered MMORPG addictions (WoW mostly, some EQ2 as well), I can't say I mind paying a little bit for XBL.

Some people are saying/thinking the next Xbox will have free live. I completely disagree, I think eventually Sony will adopt MS's model for online services. They just announced launching a subscription based tiered program. While online play will supposedly still be free, I'd imagine the subscription service will get you, exclusive videos, early access to demos, maybe use of Netflix, etc.

In otherwords, just like XBL except online play will be free. Or, maybe they'll be especially sneaky, and previously released games are still free to play online, but future releases will require the subscription.

I don't want to hear any "Sony wouldn't do that!" comments.

Also, anyone can say this is a mistake on MS's part to charge for online, but it's almost pure profit for them, and with so many subscribers, it's silly to say they've done wrong in charging for XBL.

I said $0.1 per GB, and yes that takes into account all those things you mentioned.

For example, Akamai is a big company that offers content distribution. For high volume customers, they charge $0.05 to $0.15 per GB for video delivery, which has more requirements than simple file serving:

http://blog.streamingmedia.com/the_business_of_online_vi/2009/01/video-cdn-pricing-stable-in-q4-with-discounts-being-given-at-lower-volume-levels.html

Your opinion, which you are entitled too, does not give you the right to lambast those with differing opinions.  Furthermore your use of perjoratives and sexually deviant metaphors to accentuate your point, says more about you then it does about anyone else.

On topic, I've paid for live, for 3 years now, total cost to me has been $130 ($35x2 + $50); In that time I have experience maybe 2-3 non-planned service outages and had my user interface undergo one complete overhaul and numerous minor upgrades.  I do not mind paying this money once a year for the features that are available on Live.

I've had my PS3 for about 3 months, and experienced one unplanned service outage; that's not really a fair comparison I know, because i don't have the history with the PS3 that I do with the 360.

Now, would I prefer Live to be free?  Yes, but I'd prefer them to give me the consoles and the games as well too.

As for the value proposition in comparison to the PS3, I think the inclusion of Blu-Ray is the biggest plus for the PS3 vs the Elite.  At the same price you get a machine that plays 90% of the same games AND plays hi-def movies.  So IMO the only thing holding the 360 back now is the price.  Sony made their move, now the 360 will have to make thier next one.

did you forget software?  i buy about 15-20 games a every year which is like $1000.  that's $1000 that is now directed at sony instead of the 360 because i refused to pay $50 for live.  now neither of us can really be 100% about how things would have played out if live was free but i feel pretty confindent that MS has lost more then a handful of customers.  so maybe, just maybe, it hasn't worked out as much in their favor as you think.