The Rise and Steady Decline of Xbox LIVE

How does a place of business succeed? First, the company needs to offer a great service or product, second, the company needs to be professional and courteous to its customers, and third, they need to continue to expand and to offer better and more interesting products. But what happens when the competition begins to catch up and offer greater deals at a lower cost? What happens when the bigger entity stands tall, stubborn in its dominance, refusing to change? A power shift is coming in the next couple of years and Microsoft needs to realize its tight grip on content and features must loosen if it is to stay the dominant player in the console space.


Microsoft brought something entirely knew and exciting to the table when they launched the first globally connected and contained internet experience to a console for the original Xbox in November of 2002, and it would go on to change gaming in the living room forever. Sega had brought online play to the Dreamcast years before, but this was a much bigger service; a single gamertag would follow the player from game to game, a unified friends list would show you what each of your friends was up to, full support for talking through headsets, and all through the speed of Broadband internet, not the slow dial up the Dreamcast had been hampered with.

I remember the first day of the service, named Xbox LIVE, the struggling annoyance of setting it up, of having to call customer support, anxiously waiting to finally get Ghost Recon all set up to play with my older brother halfway across the world. Was it a too good to be true promise? No, when all was said and done, it was a glorious night of fragging random strangers in a manner previously only reserved for PC players. Microsoft had brought Xbox players from all over the world together and changed console gaming forever.

Xbox LIVE was sold as a package which included a headset, software, online samples of Moto GP and Whacked, (Remember that? No? Neither does anyone else) along with a year subscription for $60. Standout launch titles included Ghost Recon, Unreal Championship, Mechassault and Moto GP. The Xbox LIVE service would become a large success and would only grow more significant in 2004 with the release of the “Tsunami” update; which would bring with it support for clans, content swapping and voice messages as well as other improvements. This was all in anticipation for the massive influx of players that would be joining the Xbox LIVE bandwagon once the biggest release of 2004 came around; Halo 2.

Halo 2 would break records and set Xbox LIVE aflame. The month following Halo’s launch would also see the quiet release of the Xbox LIVE Arcade service. Available as a disc ordered from Microsoft or obtained in an issue of the “Official Xbox Magazine”, Arcade was a service testing out smaller downloads such as Pac-Man and Galaga, but would soon become a very important element in the Xbox machine. Xbox LIVE would quickly break the 2 million subscribers mark and continue growing. While some gamers would complain about paying for the service, there was undoubtedly nothing else like it out there.

November 2005 would see the release of Microsoft’s Xbox successor; the Xbox 360. With Xbox LIVE functionality built into the console, and given both Silver and Gold membership tiers, the service was given another big overhaul which included a built in Marketplace for content such as game demos, themes and Xbox Live Arcade titles; which was now an exciting and full featured program. With a free option and a larger emphases on the users Gamertag and identity, with features such as Region and Gamerscore, Xbox LIVE was bigger than ever, and with no competition it was the de facto king.


The first signs of a competitor to Microsoft’s crown would come in March of 2006, when Sony would announce the online platform for its upcoming console, the PlayStation 3. Originally named the “PlayStation Network Platform”, it would later be shortened to just “PlayStation Network.” Sony’s first attempt at a unified space would also include support for its PlayStation Portable device, with identity and content shared between the two. Included features would be similar to Microsoft’s Xbox LIVE service, with the biggest difference between the two being Sony’s stance on a subscription model; it wouldn’t have one. Unlike LIVE’s restrictions set upon Silver members, such as no online play, PSN would be a free service provided to all PlayStation 3 users, which would include the ability of playing online multiplayer with friends and strangers alike. This announcement was followed by a wave of praise from Sony supporters and was a fact thrown in the face of LIVE users; but fans would later learn that this choice would be both a blessing, and a curse for the service.

Shortly after launch early adopters of the PlayStation 3 console would realize that although the tech and Blu-ray features were great, sometimes free isn’t necessarily better. Without the extra backing of a monthly income, the PSN service would be a somewhat clunky and slower experience than that displayed on the Xbox 360. Being Sony’s first attempt at a unified network growing pains were to be expected, but all of the bragging that had been done by Sony fans about their completely free service, may have been a little premature.

Being a free service the PSN can be a much more sluggish experience than that on Microsoft’s Console, with content purchases and online play being plagued by slow download speeds and frequent lag, which was a problem at launch, and still to this day. The service would be missing some key features out of the gate but would, in time, see improvements such as ones seen by LIVE user’s, but in 2006, it was definitely not the online contender Sony and its fans had hoped for.

In 2008 Microsoft would assert it’s dominance and announce NXE, the “New Xbox Experience.” A full retool of the Xbox 360 interface, it would show that Microsoft was serious about becoming a multimedia box that could be used by the entire family; not just a toy used by gamers. Included in the update were new Avatar’s that would be a visual representation of the user on all of Microsoft’s LIVE enabled devices, the ability to install games to the hard drive for quicker loads and less strain, and an entire new host of interactions between friends, such as a Party feature that would allow friends to chat and leave and enter games all while staying together. The biggest feature however was the partnership between Microsoft and Netflix. The growing Netflix brand and it’s unique streaming service was now built into the Xbox Dashboard, and available for all users who had Gold status, and a Netflix membership. This was a partnership that would begin a new era in home console use, and was a sign of the changing time’s coming to LIVE.


With Microsoft announcing new applications for their LIVE service, both Sony and Nintendo (who were growing their own online brand; albeit much slower than the competition) would announce partnerships with Netflix as well, set for release in 2009. Later Hulu would join in on the fun for all platforms. In 2010 Sony would take its biggest stance yet in the online space by revealing PlayStation Plus. An alternative option for PlayStation fans, Plus would be a subscription based service that would offer user’s various benefits such as cloud saving, automatic updates for games and hardware (which would fix one of PSN’s biggest problems) full game trials, exclusive beta’s, and free full games and sales every month. At only $17 for 3 months or $50 for a year; PlayStation Plus would also be a cheaper option than Microsoft’s LIVE program.

PlayStation Plus has grown into a large bonus and has seen critical and fan acclaim. Sony was smart to have Plus be a strictly beneficial program, not a mandatory service. Player’s who don’t care for the comfort benefits can still get all of the regular features for free; including online play. Payers of the service also see more than their money’s worth with the frequent exclusive sales, and the large quantity of free software that heads their way. Some months may see the availability of multiple large titles, as well as smaller games, free to Plus subscribers, giving fans a large incentive to stay an active member. Once you deactivate Plus you cannot play those free games you were given until renewing again, but having a large backlog of content awaiting your return is a rather nice incentive for fans to stay loyal to the PlayStation brand; while Microsoft currently does have a “Rewards Program” it is as paltry and useless as they come.

For making all of the right decisions and garnering large fan approval leading into 2011, Sony was about to throw all of that away and become a shining example of how NOT to handle a situation. The event I’m speaking about is of course the infamous PlayStation Network attack and outage that occurred in the early months of 2011. On April 20th, 2011 the Sony Playstation Network and Qriocity were hacked and taken offline. Sony acknowledged the event but didn’t go into specifics, leaving many to wonder what had occurred to bring down such a large service, as many could not only not play online or speak with friends, but play certain downloaded games and services.

On April 26th, Sony finally made public the point that whoever had taken down the network had also potentially obtained the user data of over 70 million accounts; this included names, address’s, emails, passwords and other information. The outrage over Sony’s lack of protected infrastructure and the length of time they took to inform the public was tremendous, with numerous news outlets covering the story on both television and online. The world would later come to find that Sony’s problems were much more direr in terms of overall security and that they had known about the issues but had not taken the necessary actions. Sony would soon inform users how they could go about obtaining a credit report, freeze their accounts and file a fraudulent alert. The FBI and other administrations would get involved in one of the worst cases of security theft around. Sony would see their services come down for over a month, losing themselves and other companies millions in the wait. Full production would finally return in June, but the damage was done.

In the weeks following Sony would offer PSN users the opportunity to download two free PS3 titles, and two free PSP titles as compensation for the trouble. They would also throw in a free month of PlayStation Plus to users, and two free months to previous PlayStation Plus subscribers. The gesture gained some fanfare back, but many were still questionable on Sony’s handling of the matter. While Sony was dealing with the horrific event, Microsoft just smirked, as they’re service has dealt with attempted attacks, but they have the necessary security to thwart them. The event caused most, even criticizers of Xbox LIVE, to look at the service more favorably, as they could see another benefit their money goes towards.; security. The two services were inching closer, but they were still quite far apart.


In the time since inception, Xbox LIVE has been the staple that all others are compared. Sony is doing what it can to move forward and overcome obstacles, and Nintendo is finally stepping into the real race with the Nintendo Network and the Wii U and 3DS. Microsoft however has sat atop the throne quiet and cocky; and it has made them fat. Over time Xbox LIVE has seen rise to more and more features, features most consumers don’t want, and worse, users have seen rise to more and more advertisements sneaking their way onto their screen.

The price of Xbox LIVE has gone up in recent years, from $6.99 a month to $9.99, from $50 a year to over $60. Microsoft made a statement describing the increase as necessary due to the vast superiority of the service in comparison to previous iterations; users get much more content. That is true, Xbox LIVE still provides more features compared to the competition, but how many of these features are actually utilized by the player base? And if Gold subscribers are paying a monthly fee, why can’t they opt out of advertising? The Xbox 360 has seen Facebook, Twitter, Internet Explorer, Zune Video, Xbox Music, Last FM, Hulu, Netflix, HBO Go, Youtube, Xfinity, Video Kinect, Crackle, ign, Manga, and countless other services come to its platform in recent years, and they are all locked behind the Gold standard. Users are paying for this endless fluff. I am sure most would rather pay a much more affordable amount, rather than have these programs cluttering up their Xbox Dashboard.

Both of the competitors continue to improve and add additional functionality that appeases both the hardcore gamer, and the casual media fan. Nintendo has upped their online fare with the 3DS handheld, and Sony continues to improve the sharing capabilities between the PS3 and the PS Vita. Both companies are looking towards the future while being kind to their consumer’s wallets. Microsoft however, has actually become more greedy while filling their products with additional advertising revenue and electronic garbage. This excess nonsense is even slowing down the hardware of the aging 360, as simply turning on the console gives way to a lengthy sign in process and a loading circle as all of the squares on the Xbox Dashboard slowly fill in with various film, music and gameing advertisements.


Now I understand that having a device that does it all isn’t a bad thing, I have a T.V. that includes Netflix, Hulu and other applications within its hardware, I enjoy having the option to browse through various services on my mobile device or console, whether in the living room or elsewhere. Having options is great, what is not great, is having the audacity to make consumers pay for that opportunity when no other provider does. Microsoft is glaringly ripping off their fans, and the mass market is allowing it to happen. The vast majority of Xbox users pay the full price of LIVE simply for the ability to play online with friends, absently justifying the purchase with a nod towards the excess features they “could” perform; but probably don’t. I have gone over the birth of Microsoft’s premier online program, and shown its closest competitors growth, and both have taken very different paths to success.

Microsoft was first to the party, eating all of the food and drinking all of the booze; that once Sony and Nintendo arrived, there wasn’t any left. User’s flocked to Xbox LIVE because it was the original option, Microsoft won by default. But then they allowed themselves to go, Microsoft sat down and continued to gorge, while Sony and Nintendo have been running ever since; getting more fit. Microsoft has seen that they are falling precariously close to losing users, but instead of lowering the fee, they have slowly and quietly wrapped a leash around their throats.

Most LIVE subscribers have been one for so long; they forget just how little Silver (now Free) users get. Microsoft has been building a wall for years, and it is now very very large. Almost every feature Xbox 360 boasts is locked behind the Golden door. A Free Member is limited in so many ways that the Xbox simply returns to its most basic function, that of playing a disc. It is obvious and known to most that features such as Netflix, Hulu, and online play are reserved for paying subscribers, and begrudgingly accepted (even when those same programs are free to PS3,PC,Wii,3DS,Wii U, PS Vita, Android, iOS, etc users) but did you know Free members can’t even download a demo at the same time as their paying counterparts? A Free user cannot even use Internet Explorer on their 360, a freely given out program for years to anyone with a PC.

That is not all either, a Free user can’t use to send text messages to people on their friends list, they can’t even get into Party Chat with friends. A Free user cannot use Cloud Storage, or Xbox Music. A Free user cannot use Video Kinect or YouTube. A Free user can’t even open Halo Waypoint; a “free” application to look at stats and read, watch and browse all the happenings in the Halo universe! And worse, a Free user cannot obtain downloads in which they are entitled in certain games. Forza Horizon for instance, had various pre order bonuses at various retailers in the form of free vehicles for use in the game. Free users, upon entering the code and starting the game happily go into the menus and click the pre order cars they are entitled, but instead of a download beginning, they get a message stating they need Xbox LIVE to obtain the items. A free incentive to purchase your game, and you lock the goodies behind your very tall wall; unacceptable. When you stop paying for LIVE you are essentially going back to the Stone Age with your Xbox.

Microsoft has fit a very tight leash around each and every Xbox LIVE subscriber, one they don’t even realize is there, for when they allow they’re subscription to lapse, they then finally realize just how many basic functions have been taken away from them, and they will crawl back into paying, whimpering as they do so; for that other world is nothing but a bare and terrifying wasteland. Microsoft has built a Monopoly on their service and most people don’t even bat an eye, for they are primarily just paying $60 a year for online multiplayer, and the other features are  simply “justifiable reasons” to do so.


Microsoft may be sitting pretty now, but they’re in a false sense of security, they are getting nearer to the top of the mountain in which they have been climbing, and the edge fast approaching will surprise them; a fall is coming. Microsoft has ignored Nintendo and Sony for too long, and when the new hardware arrives within a year or two, they will realize they did not take the competition seriously. Sony will make its biggest leap forward with the PlayStation 4, as they are sick of being behind Microsoft, and the American company won’t see it coming. Sony’s future online infrastructure will make everyone forget the mistakes they took with the PSN, and will make Microsoft take a cold hard look at its service, but consumers need to take a stand as well. It is time people let it be known that they have had enough of Microsoft’s leash. They sit atop their pile of cash and ignore the cries of the angry and fed up consumers who have had enough of this whoring out of their favorite hobby. Microsoft has taken a great service and locked it behind a steel door that only accepts cash, and it is time consumers break the door down. Gaming is a hobby that is meant to be enjoyed with friends and strangers alike, and paying so dearly for that right, when it is easier to obtain elsewhere, is inexcusable.

As always, if you have an opinion, feedback, or just wan’t to scream your disagreement at us,  feel free to comment below and leave us your 2 cents. Open conversation is always great.

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