You'll never see a free xbox live that allows players to play multilayer for free, and honestly rightfully so. The difference between playing online on PS3 and on Xbox 360 is night and day. I use to scoff at paying for an online service when I only had a PS3, but the service offered by XBL is vastly superior. You get what you pay for. XBL has paved the way for quality online gaming from its private chat/party chat system to its online store that offered free demo's for games years before PS Plus ever came out. Cheating is less prevalent, and those reported and caught are either banned for life, or their gamertag is branded as a cheater for the rest of their days. While paying $10 for an online pass sounds like a good idea, for people that buy 20 games a year, its not very practical when you could pay $60 a year rather than $200. XBL has made a pretty effective tiered payment program where you can pay yearly, every 6 months, tri-monthly, or monthly. Paying monthly costs as much as netflix instant stream but you end up paying $30 more a year that way.
The online pass was created to recoup money off used game sales, which by all indications, seems to be coming to an end this generation. Both Sony and MS seem to be coming up with some way to prevent consoles from playing used games. I have no idea how this will work, but if my theories on how they will accomplish this are accurate, I do not like it. I personally don't buy used games anymore because its just a rip off. $5-10 off for a used copy isn't for me. I'm just wondering if it will hurt redbox's game rental abilities.