Xbox Live beats $1 billion in fiscal 2010, about 50% pay for Gold

Wednesday, 7 July 2010 10:29 GMT By Patrick Garratt


Looks as though Microsoft’s broken into dream-like territory with Live cash, pointing to a ten-figure count in the just-ended FY.

An email from Dennis Durkin, Xbox’s chief operating officer, has claimed that about half Live’s 25 million users had Gold subs in the year ended June 30, making for revenue of about $600 million.

Sales of products like movie and TV show downloads topped subscription revenue for the first time, the exec has confirmed.

That could mean Microsoft saw around $1.2 billion in Live revenue in FY 2010.

“The old playbook of ‘launch and leave’ is a relic of the past,” Durkin said, as reported by Bloomberg.

“Today with Xbox Live, it’s now about ‘launch, sustain, retain’ by continually adding new content that enhances the original experience.”

Microsoft is apparently in an increasingly comfortable position with its Xbox business. Operating income of $1.04 billion for the Entertainment and Devices Division in the last financial year – more than six times income in fiscal 2009.

The company is due to report 2010 results July 22.

Competition incoming

Microsoft may be about to face stiffer competition in the premium console service “space,” however, as Sony has just launched its own take on the revenue stream with PlayStation Plus.

Plus offers early beta access, full game trials, “free” PSN games and more for a yearly sub.

PS3 online play will remain a free service, though. Xbox Live online play is only available to Gold subscribers.

In addition to straight opposition for gamer dollars, Microsoft may also be about to face a push-back from publishers. Bobby Kotick, Activision’s omnipresent frontman, told the FT this week that he wants more of a financial incentive to put games like Modern Warfare 2 onto Live, and claimed that up to 60 percent of Gold subs pay exclusively for the purpose of playing the I-Ward shooter on 360.

Kotick said he wants a choice of more platforms in this area, and plans to “aggressively support” incentives to hook PCs up to TVs in order to cut out cash-swallowing middle-men between Acti Blizz and the online gamer.