Monday, September 04, 2006

Whoa, can this be true?

A quote from this story:

More than 50 million downloads of gaming and entertainment content from Xbox Live Marketplace to date
Over 2 billion Microsoft Points sold to date
When I read the first item, I wasn't that impressed because a lot of stuff can be downloaded via Xbox Live for free. I've downloaded a lot of demos that way (Dead Rising, Saint's Row, many XBLA games).

But then I read the second item and said "whoa." Each Microsoft Point is worth $0.0125 -- so 800 of them come out to be $10. This means that Microsoft has sold $250m worth of Microsoft points. That's huge. It basically means that every owner of an Xbox 360 so far (about 5m of us) is willing to spend ~$50 on games and other materials via download. Considering that we spend $50 a year on Xbox Live Gold in the first place, this is no small feat.

In addition to my Xbox Live Gold account, I've purchased $25 worth of Microsoft Points to buy demos and such over the last 6 months -- about $12.50 every 3 months. Granted, this is not much money when you look at what a typical Dead Rising sale can make @ $60. However, it requires no middle men. No trucks, no disc manufacturing, etc.. There are no retailers involved. There's just a website and "microtransactions" that have a weird math scheme to make it seem like you're spending less than you really are.

To really put this in perspective, consider how long it took Apple to get to $250m of revenue from iTunes Music Store -- it took selling 250m songs, which took a number of years IIRC. It certainly took longer than 9 months. But really consider how many users it took to reach that. Way more than the ~4m on Xbox Live (60% of 6m XB360 owners).

I've long said that Xbox Live might be Microsoft's best online play yet, and these stats seem to be showing that. When I first bought an Xbox circa 2002, I was not thrilled about paying a yearly subscription fee to Microsoft to be on this network. I had been playing Madden around the same time on my PS2 with the online adapter and hadn't paid anything to do it. As it has turned out, I've really enjoyed the controlled experience of Xbox Live, to the point where I don't mind paying for the Gold subscription. The community, the reliability and the ease of use are all worth paying for. I'm glad to hear it's going this well for them.

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