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I have heard that a good alternative to Xbox Live for playing with friends over Internet is to set up a virtual LAN and use SystemLink over it. Apparently there are two platforms which currently allow this: XLink Kai and Hamachi.

Has anyone tried them? Are they legal? What are the limitations?

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You and your friends could also get a router that supports VLAN's as well, and connect that way. But the lag may be a problem.

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Haven't tried it yet, but I suggested to my friends that we use Hamachi.

I haven't seen anything that would indicate that using Hamachi for this purpose would be illegal, but as always, check local laws, the EULA, etc. if you're concerned.

One of the limitations is that your Xbox connection has to go through your computer, typically requiring 2 NICs, and that those connections are bridged. Also, you won't get LAN speeds or pings, which may degrade performance.

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I have also found this one, apparently it is simpler to use and does not require registration:

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I work as tech support for hamachi, and it is possible, I helped some kid set it up on his home network one day. I was surpized how well it actually worked. Of course you need a good internet connection for it to work.

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