I can sort of see them making it free, like the PSN. However, they would still have a pay service. They'd have to revamp the gold accounts to be more beneficial to paying subscribers. They'd also probably have to start tying all Gamertag bans to consoles instead of just banning accounts for small offenses. Then you can keep down the number of cheaters and duplicate accounts.

I really do think XBL will go free multiplayer someday, but it will be limited. For instance, you might not have ranked matchmaking in Halo 3, but you will have custom and social games. Pretty much everything ranked I would make pay because of the hardasses that would pay to play that. It would create more of an "elite VIP membership" status for people. They should also have "free" benefits for those paying such as free themes, free rentals, and free gamerpics/avatar accessories.

At least that's how I would do it.