Xbox Live to Earn Over $1 Billion

July 7, 2010 By Ryan Fleming

The online side of the Xbox 360 is estimated to have earned nearly $1.2 billion, up from $800 million last year.

Although it is standard practice for Microsoft to withhold actual sales results of products, Bloomberg is reporting that the Xbox Live sales have generated around $1.2 billion in revenue this year.

According to Microsoft, about half of the 25 million XBL users paid the annual fee of $49 to play online games, which would amount for about $600 million. The rest was generated by movie rentals and purchases, avatar additions and XBL arcade games. If the estimate proves accurate, it is good news for Microsoft, who have seen sales beginning to slip compared to rivals Sony. Microsoft is also banking heavily on the release of the Kinect gesture–free controller, but judging by the low pre-orders of the Kinect, the early indications are not looking great.

Sony recently debuted its own online subscription model, the PlayStation Plus service, which will also run $49 per year. It will take some time for the Sony service to reach anywhere near the levels of the XBL, and Microsoft is taking full advantage of the head start they are currently enjoying.

“When it comes to online gaming, they’re [Microsoft] the only significant alternative to us,” Activision CEO, Bobby Kotick, told Bloomberg. “We’re driving a lot of the subscription interest and certainly hours of game play.”

Planned in the near future, Microsoft will introduce ESPN streaming to the Xbox 360, are considering an exclusive television channel, have introduced new family membership plans, and have struck an exclusive deal with Activision, distributor of the Call of Duty series, that will give it a month of exclusivity on any upcoming expansions for the series. Call of Duty: Modern Warfare 2 currently holds the record for the highest grossing download ever on XBL.

Showing 7 comments

Joe at 2:01pm 27th September 2010 I wonder how 25,000,000 * $49 is equal to $600 million?
Xbox360:Camdingirth at 9:03am 9th September 2010 I think the only reason Kinect has a low pre-order rate right now is that most gamers are pre-ordering games like Halo:Reach and Call of Duty:Black Ops (Both of which have some kind of 'premium' version worth $150). With epic games like this on the way, I feel it's either distracted people from Kinect temporarily, or drained their wallets for the time being. I'd love Kinect in my living room, and I'm looking forward to seeing my 4-year-old's face when she plays 'Kinectimals' in November. Machines like this were science fiction when I was playing 'Duck Hunt' and 'Super Mario Brothers' back in '89, and I think it's something that the new generation was almost expecting to arrive shortly anyway.
Justin at 10:30am 18th July 2010 Id like to know why Xboxlive is $49 in Us and in Australia it is $79 and I ended up getting charged $92. WTF?
Paulo at 7:40pm 12th July 2010 Like most xbox live users, I use the service for CoD. I particularly detest the points system, it it totally pointless (pardon the pun). Why not just use dollars and cents. I don't accept the "universal credit system that works across international borders" BS, it is a system contrived to rip off its users and confuse people. You cannot buy the exact amount of points you want, you always have to buy an unusual amount 1600 credits. The 800 credits = $1 system is designed to confuse. You can never bring your account down to zero. And Microsofts own explanation reeks of BS... "But the big deal here is that Points allow what technical types call "micro-transactions." HOW? How when 800 points = 1000 cents, how is that better for microtransactions? Honestly, Microsoft do absolutely nothing to engender loyalty in their customer base. Bilk, Bilk, Bilk... At one point they were selling 20Gig hard drives for $100! Now they are offering 250Gig for $130. For $130 I can easily buy a 2Tb drive, 8 x bigger! Bilk, Bilk, Bilk.
tiggymow at 3:58pm 12th July 2010 Amazing, that sure is a LOT of money. Wow. Lou www.privacy-tools.es.tc
Klatu at 9:27pm 8th July 2010 The pic shown above is of the OLD xbox live logo. As in "original" xbox and not xbox 360. Just throwing that out there, as "original" xbox live was recently discontinued.
kim at 8:47pm 8th July 2010 maybe there are low preorders for kinect on other sites, but on amazon.com one of, if not the largest online retailers, it's been doing very well. was #1 in all of video game sales, for 6 straight days after initial launch (compared to sony's move which has never been higher than 23rd place) . and it continues to do well, was listed as backordered for several hours on jun 29th, and is still listed as #53 in the top 100 in video game purchases, and #3 in xbox adventure games sales. not too bad considering the mass marketing hasn't even begun yet!