Microsoft’s Xbox Live service hasn’t skipped a beat since its inception, and this past year was no exception. Even with free alternatives offered by Sony and Nintendo, Xbox Live raked in $1 billion of pure revenue last year. Bloomberg believes that half of that earned revenue is from subscription fees, which explains why Xbox Live will likely never be a totally free service.
Also noted is that Bloomberg states that TV and Movies have topped subscription fees in revenue, which shows that Xbox Live gamers are more likely to purchase media digitally than ever before. This is all in all, great news for Microsoft and its media partners.
“Xbox Live has helped sell a lot of consoles and created a lot of loyalty,” said Matt Rosoff, an analyst at Directions on Microsoft in Kirkland, Washington. “Everyone has been talking about Microsoft’s inability to innovate, but this is a pretty good example where they have innovated. They timed it just right with this one.”
DLC is also ramping up with just about every big game release having some sort of DLC add-on which has just about changed the traditional video game sales model entirely. According to Dennis Durkin of Xbox: “The old playbook of ‘launch and leave’ is a relic of the past. Today with Xbox Live, it’s now about ‘launch, sustain, retain’ by continually adding new content that enhances the original experience.”
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