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Xbox Live Has Billion Dollar Year

| 7 Jul 2010 13:30
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Downloadable content pushed the revenues for Microsoft's online service into the ten figure bracket, says chief operating officer Dennis Durkin.

Xbox Live is an excellent source of revenue for Microsoft, so good, in fact, that sales on the service "probably" topped a billion dollars for the first time in the last financial year.

Chief operating officer Dennis Durkin told financial site Bloomberg that roughly half of Xbox Live's 25 million users paid for a gold membership, which made around $600 million. Durkin also said that sales of DLC, movies and other extra content topped the revenue from subscriptions for the first time, which suggests that the service made at least $1.2 billion.

Durkin said that Xbox Live was a big part of the future of gaming and the sloughing off of old habits: "The old playbook of 'launch and leave' is a relic of the past," Durkin said. "Today with Xbox Live, it's now about 'launch, sustain, retain' by continually adding new content that enhances the original experience."

Durkin didn't share the exact numbers, but Goldman Sachs analyst Sarah Friar's estimates tally with the suggested $1.2 billion. She believes that revenues were slightly lower at $1.1 billion, up from $800 million last year, and that the service has gross margins - the percentage of sales remaining after production costs have been deducted - of around 65%.

Source: Bloomberg via Edge

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