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Basic PSN service to include online gaming

Could Krazy Ken Kutaragi's Playstation Network be "live," "4D" and largely "free" when it comes to online gaming? It looks that way according to this story (No, I'm not trying to turn this site into PS3 fanboy):

...regarding the PlayStation Network Platform, [TeamXbox has] learned that the basic service will be free and include online gameplay, at least at launch; only specific titles like MMO games and premium services like online storage will require an additional fee.

Microsoft is telling us not to expect big changes in their strategy no matter what Sony does, but the news that the PS3 may offer "free" online gaming at the base level has to affect people's opinion of Xbox Live. Sony is playing catch up in this area of the business and offering gamers more for less is one way to get our attention (It's certainly better than stupid buzzwords like "4D"). Then again, at a predicted price point well above the Xbox 360's, the PS3 isn't exactly going to be a bargain hunters dream. Maybe this is Sony's way of taking the edge off that Paris Hilton price tag. Or will all the good games end up charging their own fee anyway?

This developement forces me to wonder if MS will eventually offer online gaming with XBL Silver, or just do away with membership levels altogether. Even if Sony is just using this as a short-term gimmick for the PS3 launch, it could lead to more "Free Gold Weekends"for 360 owners, like the promo coming up at the end of March.

Do you think making PSN "4D and free" is a smart move on Sony's part? More importantly, does it require a response from MS? Do you think you are paying a fair price for XBL Gold?