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My, my here we go again. There just is no end to issues plaguing gamers who have to deal with Games For Windows Live. This has to be the single worst piece of software ever created.
I once posted a fix for games like Fable III and Dark Souls: Prepare To Die Edition and if you’re not using Windows 8, that fix should still work for you and can be found by clicking here.
If you are using Microsoft’s latest operating system however, you may run into a new issue that blocks that fix. It seems that Microsoft Flight, the once quickest fix for a non working Games For Windows Live is no longer the be-all, end-all solution. Having finally decided to play Dark Souls on my Windows 8 PC, I encountered the same issue with Games For Windows Live not actually starting up with the game and allowing me to update it therefore fixing any and all future problems with the service. After all, that is the issue. The damn thing just won’t update correctly.
I tried the Microsoft Flight fix but I encountered a new error where the game is telling me that Games For Windows Live could not initialize because it is either corrupted or running already. I tried several fixes but what finally worked for me was the following. I hope it indeed helps you overcome these terrible issues with a truly terrible service.
This method worked for me. It seems that v3.3 of Games For Windows Live actually updates correctly and points you in the right direction for the correct updates. Since the Microsoft Flight fix is no longer viable to Windows 8 users, at least it seems that way, this is likely the best fix.
If you find yourself still having issues, there seems to be a possible fix by editing, deleting, and changing filepaths in a System32 folder called CatRoot but it involves an advanced knowledge of using Windows. I tried it myself and it did not work but others are saying they have seen results.
I can attest that the above method I describe worked for me and I have since been able to kill demons in Dark Souls: Prepare To Die Edition (along with the lovely DSfix mod that makes the game playable).