By 2007, Microsoft hopes to have 10 million subscribers for Xbox Live. It's an ambitious goal, but if met, it could mean a cash inflow in the neighborhood of $1.2 billion per year for the company. Like any ambitious goal, though, it has a lot of obstacles in its path. And the company's fate isn't entirely in its own hands. On the technology side, there's really nothing to complain about. It's astonishingly easy to link your Xbox to the Internet and challenge opponents hundreds or thousands of miles away. And the features Xbox Live offers are masterfully thought-out and organized. But that might not be enough to convince users to sign-up for the service.

Arguably the biggest problem is the also the trickiest. To be a part of Xbox Live, you've got to have a high-speed connection to the Internet. Microsoft's argument is online gaming via a 56k modem is a frustrating experience that will turn away more customers than it will attract. While broadband is certainly more widespread than it was a few years ago, it has still fallen far short of expectations. Industry analysts estimate that as of Jan 1, there were only 10 million or so homes were equipped with some form of high-speed access (DSL, cable or satellite) in the U.S. – far short of the 50 million some companies were anticipating.