Yes, but they are charging for a matchmaking service, nothing else. It doesn't matter if it's the best service, the money people spend on it isn't what makes it the best. They are charging $50 a year so that one person's XBox 360 may act as a host for the other XBox 360's playing a multiplayer game - most games on XBox Live use peer-to-peer networking, so in multiplayer, they only touch XBox Live servers to ask for the IP addresses of other players online. There are other things XBox Live offers, true, such as online leaderboards and gamerscores and whatnot, but most of those are offered to people who don't pay $50 a year, the fee is mostly for true multiplayer, which costs Microsoft almost nothing.