WSJ warns Xbox Live is too risky for MSFT?
At the end of the day, I doubt Michael Pachter plays games, or if he does, he hasn't made new friends on Xbox Live. I, on the other hand, think the social aspect is just as important, if not more important, than the escapism of playing the games.
I've met a number of people on Xbox Live that I consider friends, people I wouldn't hesitate to hang out with in person if we didn't live so far away from one another. When I don't play on Xbox Live for a while, I wonder how they're doing, and when I'm online, I look to see if they are too so we can play together. I think that qualifies as social interaction. The Xbox Live slogan, "it's good to play together", is 100% right, IMHO.
Has Michael Pachter done any research into World of Warcraft? That game is massively addictive, and one of the biggest reasons is social interaction. I can't imagine that game not being profitable.
According to bungie.net, 337,181 unique people have played Halo 2 on Xbox Live in the last 24 hours... and Halo 2 is over a year old.