Regarding dedicated vs. P2P servers:
The vast majority of console games (on any platform) use peer-to-peer servers, which simply means they make one player run the server. Game servers are not processor-intensive things at this scale... basically all they do is stream out game data to 12-16 clients, and receive incoming player input streams. And they have some code to keep everyone synchronized.
There are a few PS3 games that use dedicated servers... I think Resistance is one, and Warhawk is another. But you're dreaming if you think every online PS3 game uses dedicated servers... few game developers have the money or even expertise to maintain high-availability game server networks capable of serving thousands of simultaneous customers (realistically, only the MMO folks can justify doing that.) And you're especially deluded if you think game developers will do it for free. Home will use dedicated servers, but they have a business model that provides for that -- they will sell you lots of useless crap, and if collectively, you don't buy enough useless crap, they will shut it down.
UnnDunn
I was under the impression that most of Home's income will come from companies advertising in the virtual space in a none invassive manner? :| And with your logic, XBL should be free with the way they charge u for everything.
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