In a recent report by Bloomberg, it has been found that Microsoft has garnered more than $1 Billion large for its Xbox Live service in the fiscal year of 2009. While GrE is unable to obtain an exact dollar amount, it was reported that their revenue for 2009 was, in fact 1.2 Billion dollars as recorded on June 30th. This feat can be attributed to the 12.5 million subscribers to their Xbox Live Gold service which accounts for over 600 million dollars in revenue, and premium downloads such as movies and television shows along with, of course, Xbox Live Arcade games round out the rest of the profits.
The software and subscription sales are paramount for the success of the vulnerable Xbox 360 and Microsoft’s hardware division as a whole. With lackluster Zune sales coupled with a barely profitable console riddled with horror stories of failed hardware, its no wonder why they have to rely so heavily on software and accessory sales.
Matt Rosoff, a Microsoft Analyst states, “Xbox Live has helped sell a lot of consoles and created a lot of loyalty. 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.”
Seeing as the revenue for Xbox Live in fiscal 2008 was reported at 800 million, it appears that Microsoft is doing something rather notable with their online services. Its no wonder why competitor Sony is so hot to push their new tiered PlayStation Plus network. Relying simply on game royalties and console sales are clearly not enough for the big three to survive this ever changing industry.
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