I see it the other way around. Hardcore gamers will not sell their old games and hardware easily. They will be not the first customers of on-live. So it is perfectly right what they are doing, they attract some kind of casual gamers first. Later even hardcore gamers will enter if they offer a flat-rate payment instead a payment per view.
the only big benefit is that you don't need gaming computers at home anymore.
This is not the only advantage. There are some more. As you could see in the demonstration, you can play games instantly, no installation, no searching, all save slots are there. You can play from everywhere, you don't have to carry your pc with you. It will be easy to have some trial periods, demo sessions and similar (all trials and demos with no installation time).
You can see your friends online and you see what they are playing currently.
It is all more transparent and reacts more instantly. Gamers want to play, don't want to wait. This is exactly what they get there.
