Consoles → How does xbox live work?

I know users host the games. But what does MS do? Why do we pay a fee and why if something goes wrong on their end does a game like Halo not work?

I know this:

I have an Xbox 360:

If I host a game like Halo 3. I am the host that is managing the matches information. However, I can't have a match if xbox live is not up. I need to figure what xbox live does.

Can anyone clear this up? What does the microsoft xbox live service do? Routing, etc?

If anyone can clear this up would be of massive help. I know Microsoft does not have dedicated servers for every game but need help on figuring out how it works.

Indexing and matchmaking?

They run a master server for all games also.

Let me explain by making a comparison to PC Gaming. Let's say you are the game company Relic and you are going to make Company of Heroes for PC. What you have to do is create an online system to help players find each other, a system to rank the players based on their wins, a friends list to keep track of your friends, and a chat system so you can chat with people. That is a lot of programming to get all that running. And of course every game is going to do the same thing, so just because I have a friends list in Company of Heroes it is only for that game, I can't see that my friend is playing another game or chat with them.

What Microsoft did was create the Xbox Live system that has all this programming in it to connect gamers together, allow voice chat, friends list, achievements, and a ranking system. Then they give all this information to a game developer who basically takes these prebuilt modules and plugs it into their game. Now they don't have to spend a bunch of time programming all those features in. The best part is it works across all games so I can chat with you even if we are playing different games. The only thing Xbox Live doesn't do is create dedicated servers to host the matches, the games are peer to peer. However lot's of PC games such as Company of Heroes are peer to peer as well. So basically Xbox Live does everything except host the match.

The reason you pay for it is because at the time Xbox Live came out it was superior to anything on any console or even the computer, and Microsoft felt they could get people to pay for it. And people were willing to pay for it.

I wonder if xbox live will become free when sony releases "home"

but..with the recent price drop of the 360 and it selling like hotcakes I doubt it.

Wouldn't surprise me to see Live drop to 40 or 30 per year. Microsoft keeps releasing awesome bundle deals that include a year of live for cheap, it's stupid to buy a Live subscription separately.

I actually don't mind paying the 50$ per year to get an excellent online service. I also feel it puts the pressure on MS to keep everything running while also adding new upgrades / features since everyone with a gold acct has something invested in the product.

If you remove the investment and its free and XBL goes down twice per week, really hard to complain about a free feature..

Maybe they should make the payment optional so if you pay you always get first priority to the severs if it gets overloaded and you don't pay you have to wait or invest in the network....

Who cares about "Home", what is it going to do that Live does not? With the latest NXE update I would say MS has raised the bar again. I know people complain about paying, but you get what you pay for. I have tried Live and the PS3, 50 dollars a year is great deal, for a great service.

Thanks for the post and this thread. This Christmas, my family will start to use an Xbox 360, and I assumed it would be a bit like the Sony PS3 network.

Generally for PS3 games, you can select Sony hosts, 3rd party hosts, or any host.

I'm surprised to read that most if not all Xbox 360 games are hosted by users. I've been happiest with Sony hosted games on my PS3.

I appreciate your providing some insight for me about how Xbox live works.