Yes, I think they're both broken. Just in very different ways. I'm not going to address Nintendo's online system for the Wii because it is so far beyond broken I don't have the time or the energy to describe all the issues, much less how to fix them. So, let's get on to my issues with the applicable services, shall we?
First, LIVE and PSN are very different beasts and take very different approaches to online console gaming. LIVE is Microsoft's house. They hold the reins, they call the shots, every company that wants their game on LIVE has to report to the big M and dance however they are told. This has a lot of benefits for the gamers. Performance has a universal standard it must live up to and all games have to support a certain feature set. This kind of uniformity makes navigating all of LIVE and using it's features from a games familiar and intuitive regardless of the game you're playing.
PSN, on the other hand, is a free-for-all. With the exception of certain quality standards, game developers are free to make their online setup work however they see fit. Trophy support wasn't even required for generous span of time after it was first implemented. This "anything goes" type of system does mean freedom for developers to make things work however they want, but it also means a lot less stability for gamers when compared to LIVE. But then, being an open platform is also the reason that PS3 is the only system on which you will be able to access Steamworks and play Portal 2 Co-op alongside PC players. (Side question for Gabe Newell: How's that crow tasting?)
However, both of these systems have serious errors. The PSN issues mostly come down to performance such as instability, slow download speeds as well as lacking some of the popular features of LIVE like the oft-mentioned cross-game voice chat and game-agnostic parties (not needing to be playing the same game to be in a party with someone). While the main issue with LIVE is that you are charged for the basic functionality of being able to play your games online. This is much more insulting when one considers the fact that games on 360 and PS3 cost the same, but on 360 you can only play the single player half of the game unless you hand over another $60 a year to Microsoft. This looks especially bad when PS3, PC and even the Wii offer players the ability to play online without any charge whatsoever. The features advantage that LIVE holds are relatively minimal and certainly don't equate to a $60 price tag. Even worse, this was recently increased from $50 without the addition of any new features in an attempt to justify the increase.
That seems to be the way of things with Microsoft's products though. Whether it's the PC world with the absurdly inflated price of a Windows OS or Office bundle or the cost of a new hard drive for your 360. Let's look at that hard drive example a little closer, to really drive the point home. A 250GB HD for the Xbox 360 costs $130, I kid you not. For that money, I could buy a 1 TERABYTE drive (that's 4x as big) for my PS3 and still have enough left over to buy a game. Microsoft customers are far too willing to simply smile and say "Thank you sir, may I have another?" so there's no reason for the big M to stop screwing consumers on the price.
What Microsoft should be doing, in a world where Microsoft is fair to its customers, is have the ability to play games online included in the free LIVE membership, but save all the other perks for paid, Gold members. Keep all the exclusive demos, and parties and cross-game voice chat, and even premium download bandwidth for Gold members, but don't rob your customers of some of the basic functionality included in a game that they already paid full price for. Especially when the online component comprises such a large part of some of your biggest titles. Where would Halo, Call of Duty or Gears of War be without their online multiplayer? Charging customers $60 for a game and then telling them they can only play half of it until they fork over another $60 is the type of fine print switcharoo that normally gets companies in trouble. So why do gamers keep letting LIVE not only get away with it, but convince themselves that it is a superior service for doing so?
PSN, in a somewhat similar fashion, needs to change up how their paid vs. free services are structured. While the paid service, PSN+, is still more or less in its infancy and as such has some excuse, why not get things going in the right direction early on? As it stands, unless you buy a lot of downloadable titles or the free game offered that month (if there is one) is something you really want to play, there's just not enough to the service to warrant paying for it. Sony is starting in the right direction with the background updates, where your PS3 will check for software updates, download and install them all by itself, and the upcoming cloud game saves, allowing you to save your game to a server instead of your system so that you never have to worry about losing them and can access them from any PlayStation 3 you sign in on. There needs to be more though, and that means addressing the issues PSN has had from the beginning. Download speeds for everything from PlayStation Store games and movies to title updates are horrendous. A file that may take a few minutes on my PC can take more than half an hour on my PS3. That's pretty damn unacceptable. There's also the features people have been asking for since launch. Mainly features that have been available to LIVE users since their service launched. Features like cross-game voice chat, so you can talk to your friend and ask him if he wants to play something without have to A) be in the same game already or B) be willing to type out your message for 20 minutes using the onscreen keyboard and being able to create and join a party with friends that might be playing a different game. Personally, I've only run into a handful of occasions when I thought those features would be useful, but I'm only one man and the masses see them as a necessity. And again, like LIVE, PSN+ should allocate some extra bandwidth to it's customers so that those paying for the service don't spend the same 30 minutes waiting for Uncharted 2 to update that the free members do. In the same way that a LIVE Gold membership doesn't have enough features to justify charging for what PSN (mostly) does for free, PSN+ doesn't have enough features to warrant paying for little "extras."
PSN certainly has a laundry list of issues to work out, but its customers put up with them because they can still play games online for free. And while being able to play your games online is certainly a justifiable purchase to most gamers (why else do you think we pay for internet?) there's something to be said about the fact that LIVE is the only platform anywhere to charge an additional fee for access to features in a game that was already bought and paid for once. I enjoyed playing Halo: Reach online during the free trial offered on LIVE this past weekend, but with only a handful of exclusive titles on 360 there's not enough reason to purchase a LIVE membership when that money could buy me Dead Space 2 or Killzone 3 on my PS3, where I can play the multiplayer for free. And while I'm playing it over PSN, I'm still going to complain about the various issues and lacking features that everyone else has been complaining about for nearly 4 years now.
With an online component essentially being mandatory in modern games and replacing splitscreen play, both of these companies need to work on perfecting their online platform because they both need it in equal amounts. As for Nintendo...well they still don't think people want to play games online. And with the Wii and various DS iterations continuing to print money, there's really no reason for them to stop living in that fantasy world.
