Xbox Live Earned $1 Billion Last Year

avatars_alanwake It appears Microsoft’s investment in Xbox Live is starting to pay off.

According to a report from Bloomberg, estimates have the service raking in just over $1 billion in the last fiscal year – $600 million coming just from the annual fees of Live’s 25 million users.

Add to that sales from downloadable content, movie rentals, and buying sombreros to put on Avatars’ heads, and apparently you have quite a source of income.

Microsoft reportedly has invested about $1 billion into Xbox Live to grow the service over the last few years. And keep in mind that the entire first Xbox console was an a losing investment and the company didn’t see profits from its console division until after the release of the Xbox 360 in 2005. The entire first console and everything spent on Xbox Live back then was an investment in the future.

But while the Live division is doing well now, the entire Entertainment and Devices division at Microsoft lost $1.89 billion just three years ago, largely because of costs associated with the Red Ring of Death system error. So it’s all relative.

Xbox Live is a pretty phenomenal service, so it’s nice to see good news there for Microsoft. It should mean even more money dumped into making Xbox Live better for subscribers.


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