Xbox Live is the old subscription service, it has since morphed into Xbox Game Pass which is the monthly subscription to access a bunch of games (as well as online features Xbox Live offered before)

Xbox Game Pass was an attractive offer for consumers when MS was getting people onboard and the price was so heavily subsidized that it could never have been a sustainable model. Once they tried to start bumping the price into something profitable people immediately said "okay well that's clearly not worth it, I'll just cancel."

They attempted to make it $30/month last year before backtracking. At $360/year, even factoring in the new $70 price of AAA new releases and ignoring you can wait a few months to buy them cheaper, you had to be buying 5 new release games per year at launch just to get close to breaking even with the subscription price. 6 before you save money. So...

> It's a really attractive offering for people who don't play games all that much (that is, more than 2 hours a day)

No, it's absolutely not worth it for these people. Even at the current prices they backtracked to ($280/year if you want to play new releases on day 1), if you're a person who doesn't game that much, it's cheaper to just buy a few new games per year. If you're not a frequent gamer, why would you of all people need access to a massive library of games?

I personally have a backlog of 45 games I want to play written down in a note. And those are just the ones I wrote down. Most of these games you can get for peanuts. I just played through Fallout New Vegas for my first time. It regularly goes on sale for $0.99, or $5 if you want all the DLC. I got 90 hours of playtime out of that.

The idea any casual gamers should be paying for a subscription service to a Netflix-style game library is nuts to me. These aren't movies and tv shows you'll be flying through every evening, they're big games that can take weeks to play even if you're putting in a few hours per day.