The tin bath has sprung a leak
Yes, you pay at most a £40 subscription to be able to access all the online servers, which obviously supply the ability to play the multiplayer games. (although it has been had for as little as £10 with offers).
Consider how much you would spend going to the pub for an evening, then you have XBL (Xbox Live) which lasts all year and is a right hoot.
The games play perfectly well offline, but XBL is an enhancement.
You also then have messaging, voice communication, downloads, videos, trailers, demo's, game add ons, extra maps etc. All available via XBL.
There is now also the ability to download and watch films.
Most films and new map levels do cost extra, however it is not usually a lot (about £6-8) for the maps.
Most things in life are not free, XBL does have quite a lot that is but the newest & best stuff is not.
It's still worth it though.
P.S. you pay for the "World Of Warcraft" game discs & still have to pay £8.99 a month to be able to play that!