[quote name='crystalklear64']i personally do not care for xbox live, but if i want to play games online on my 360 with friends, what choice do I have? and that is one of the biggest weaknesses of the 360 is the lack of choices. you either get online gaming + whole bunch of other stuff, or no online gaming. there is no happy medium.[/QUOTE]
I agree, so many people here only think in terms of their relationship with Microsoft, but I suspect that there is a much bigger reason that most people neglect to mention, while they try to justify paying for the platform by mentioning feature x or y. If you've chosen the 360 as your main or only online platform (or even one of many), and all your friends are on xbox live, then it would proably be a bigger investment than $50 a year to switch to another online service or console. Not only would you need to rebuy the games you like (monetary cost), but you would be leaving the community of friends you've built (non-monetary cost). That's why everything on xbox live is so community focused. You might not be loyal to the Live platform, but you'll likely remain loyal to your individual community. And since they were so far in front of the other consoles in the online space, the other consoles still have a huge perception issue to overcome for many gamers.
Otherwise I'm still not sure what exactly we are paying for in the xbl service.
Demos? - Somebody wrote into the Cagcast recently and mentioned paying for demos. I'm not sure what that means since Silver members get demos for free, unless gold subscriptions were somehow subsidizing the demos for everyone. But think about that for a second, do you really want to pay for a demo, the very purpose of which is to sell you a game? Are you paying money to get advertised to? Is the reason that you pay for cable the commercials? Don't get me wrong, I appreciate that Microsoft requires demos, but it's not something that you should pay for.
Cross-game invites? - Everybody always brings up cross game invites, is that really what you're paying $50 for?
Where are the dedicated servers, or features like Steam cloud, that require real investment from Microsoft for that $50 a year?
On the PC Microsoft had to stop charging because the competition was offering everything and more for free.