My comments might not be of much help for your situation based on what little information you gave. My experiences might be vastly different than yours, but Ill try to give a helpful reply. I dont know him, I dont know you, and I dont know the relationship. Each person might behave differently to assertive people. The relationship will likely change, for better or worse, based on your being assertive. Ultimately, you cant control another persons reaction. I even doubt that you can control another persons emotion. You can only control yourself. I used to overreact when my wife makes insignificant mistakes. This was because I was trying to compensate for my stresses and notion of inadequacy. I was facing trouble at my job and struggling to make financial ends meet. I was keeping my problems bottled up inside myself. I would crash on the couch each evening and try to relax. Id escape into the world of the Internet too. My health would deteriorate as a result. Deep down, I thought that I needed to do something but it was easier to put my wife down than it was in trying to drag myself up. (Your friend might or might not be having similar issues.) She, along with my parents, confronted me and told me to shape up or that there would be consequences. We had a heart-to-heart-talk and things are changing for the better.
In answer to your question, take my advice for what you think it may be worth. I cant promise good results. Fussing over skills in an online-game or in grasping directions seems rather petty to me but each relationship is different. If it really bothers you, pick an appropriate time not a time when the both of you are upset and on edge but be calm, cool, and collected but also assertive, specific, and clear. (My wife says that I dont take hints very well.) Start by showing love and concern for him. Ask him if anything is really troubling him Does he have fears about his work, education, money, or other issues? Ask him if he would like some help. He might just be exhibiting displaced aggression. If he does not seem to have any hidden worries about himself, then later calmly confront him about his cruel name-calling. Explain that you are sorry that you disappoint him but that his insults and name-calling is unproductive, hurting you, and will not be tolerated (Provide specific examples of hurtful incidences if he seems to be confused.) Depending on how upset you have become with his past comments, and if you have the strength to follow through, you might say that if he is so dissatisfied and disappointed with you, then he is free to leave.
If he continues to berate you in the days that follow this discussion, then calmly but deliberately end the activity and walk away or ask that he leave you alone. I think that he would first feel angry, confused, and hurt. He will wonder why you are doing this to him and to the relationship. You might remind him of how his insults hurt you and explain that you will no longer allow yourself to be subjected to it. After a few repeated departures on your part, I think that he would get the message that his cruel comments will no longer be accepted. Ultimately, if nothing seems to satisfy you or get him to quit, have a decision to make: Continue to put up with his behavior or end the relationship. Unfortunately, I dont know how he will react. Each person may react differently based on his own values, self-esteem, and experiences.
In summary and to more specifically answer your questions:
1. I would stop and check myself if someone whose relationship I valued told me that things must change or that I would lose someones love and attention.
2. If someone stood up to me and would not take the abusive words, I doubt that I would want to shove that person out of my life. Yet, if I felt low and if I felt that I needed to try to make someone feel lower than me, I might want to shove such an assertive person out of my life.
3. To reduce the likelihood of making the situation worse, I emphasize that if you are going to confront him, do it in a calm but deliberate way. Start with a feeling of love and concern. Dont raise your voice or argue. Simply tell him how it is going to be if the relationship is going to continue.

Thank you, GEMTAG .. that was very well thought out and expressed. I appreciate very much you taking the time to write all that. As far as the online games go .. to me they are just that .. games. For some reason he takes them seriously. Maybe doing well in them gives him a feeling of status he doesn't get with work .. they take advantage of him a lot there. Anyway, your comments were very thought provoking, so thank you.