What do you get when you take the most popular online gaming console network and marry it to online video? Massive piles of cash apparently! Microsoft has announced that Xbox LIVE, the online network for the Xbox 360 console, has topped sales of One Billion dollars!
Sure, they sell a lot of things on that network. You've got themes to skin your dashboard for the console (the main interface), you've got premium images to represent you and premium items to equip and clothe your avatar with. On top of that you've got new games, old games, game add-ons and independent games. And finally, you've got music, and video.
About 60% or roughly $600 million comes from XBLA Gold subscription fees but according to Dennis Durkin, COO for Xbox speaking to Bloomberg, sales of products like movie and TV show downloads topped subscription revenue for the first time.
If that's the case then sales could see $1.3B or higher in the recently ended fiscal year.
Last year sales totaled a meager (joking) $800 million so breaking the the $1B mark is certainly an improvement. It would certainly be nice to get some percentage break downs on where all that money went but we probably won't see that any time soon.
I believe Microsoft has a plan. I've gleaned it from what I've seen lately. They are working to unite all of their platforms under one banner, LIVE. They offer Games for Windows LIVE, which ties right into the same network as the Xbox 360, Windows LIVE for email, social networking and messaging and LIVE capabilities on their new Windows Mobile Series 7. So why not sell online video through a united front and not just Zune? If PCs are going to be more and more tied to televisions, there's no reason not to. They already offer game videos through Games for Windows LIVE and I'm sure they're working to tie the Zune network into it. Why reinvent the wheel when you're staring right at one, right?
The new Windows Mobile 7 (which I covered at Cell Phone Reviews) will also incorporate Xbox LIVE right into the interface. It will probably work to serve more as a social network than an actual content delivery network, but it could still be possible to tie in product sales to it. They've already provided a way to sync your Zune content on their new KIN mobile phones so they're thinking about how their consumers can "buy once, access everywhere" which could certainly build some further brand loyalty.
The Zune network already features loads of video for sale and rent as well as music downloads. The only thing Microsoft needs to do is create a single entry point and voila! they suddenly have a combined three screen channel for selling video. They might even think about offering some free content which is supported by advertisements to generate even more income. They certainly have the computing power and worldwide distribution network available to them, it's just a matter of hooking it all together, and I believe they are working on doing just that. One might even ponder just how far they would like the three screen convergence to go, after all, they have fairly solid operating systems for all three right now. It might all depend on how popular Windows Mobile Series 7 proves.