$49.99...

That is the current retail price of 12 months of Xbox LIVE service.  Most people sign up, then just let the account auto-renew every year.  Frugal Xbox 360 gamers have been taking advantage of the latest barrage of deals on the 12+1 month Xbox LIVE card deals that have kicked off the new year.  The Xbox LIVE 12 month card codes can be applied to an existing Xbox LIVE account, allowing you to add additional online goodness (even multiple cards/years).

The new year brought about a wave of $29.99 offers from many retailers.  First Buy.com, than Walmart, and finally Amazon got into the game.  Finally, this week Best Buy is wrapping up their $29.99 deal this Saturday (February 7, 2009).  On the surface, it appears that Microsoft coordinated a retail assault on Xbox LIVE subscription cards to convert all of the new Xbox 360 owners to give the service a try.   None of these $29.99 deals have stuck for what appeared to be a limited sale and/or allocation.  Based on this, and that Microsoft would be giving up literally millions of dollars on all of those existing gamer tags that auto-renew at the $49.99 rate, it does not appear that a price drop is in the cards.

With that being said, given the fact that both Sony and Nintendo offer their online services for free, the pressure is on Microsoft to continue to innovate and offer a reason for gamers to continue to pony up on their annual subscriptions.  At some point, competitive pressure, combined with an increase in revenue from downloadable content (albeit, this is available with the free silver subscription), will likely push Microsoft to change the current subscription model.

What do you think? 

Is a price drop or free Xbox LIVE gold subscription coming this generation?