Xbox and Live

Few years ago a great race started. All three major manufacturers of gaming consoles around the world decided to unveil their new products at almost the same time, so users around the world were pretty surprised and didn’t know what to do. The ads were everywhere, Sony was presenting their en Playstation 3 as the replacement of the home computer, Microsoft pushing the Xbox, also as home entertainment system, and the humble Wii had some revolutionary innovations (you have certainly seen a Wii mote, even if you don’t own one). During the  beginning of the race no clear winner was apparent, as all had their good and bad sides – the Wii had slow hardware, PS3 had some hardware limits too, and the Xbox had the unpleasant habit of just dying (remember “Red light of death” problem in the early days of XBox).

Then while time passed by, sales went up, new great games were developed and things looked just OK. Then one great innovation surfaced – the Xbox Live network came online, full support was integrated in the existing Xbox consoles and it began gathering popularity. With its moderate price of 50$ per year Xbox Live network has now reached almost 12.5 million subscribers, bringing the clean profit up to 630 million $. With the additional virtual goods, which each of these subscribers purchases, it was expected that this year Xbox Live will reach 1.25 billion $ revenue. And it was announced on 5-th of July by Bllomberg TV, citing Forbes sources, that it has happened, the profits of Xbox Live have reached and passed 1 Billion $.

Secrets behind success?

The main advantage of Microsoft XBox Live over PS3 online service for example is the great support from third party software and multimedia content creators. Companies like Activision and ESPN have reached agreements to feed Xbox Live with exclusive content. Many other companies are looking this way too. And with the near completion of Kinetix interface which will bring new, more natural, ways to control the Xbox to casual gamers, it seems even more subscribers will come to the Live community.

The incredible success of Live service already has impact to rival companies. While Sony condemned the philosophy behind paying for network access of the console you own, it has announced that its PlayStation Plus service will cost you exactly the price of Xbox Live –  50$ per year. At this price they will give additional access to multimedia and new games, same extras as in the Xbox Live service.

As you can see the idea, that looked stupid before – paying to join the network game consoles communities, is almost sure to prevail in the next few years.

Of course if a company (Sony or Nintendo, as there are no other big players around on this market) offers the same support by 3-rd parties, and offers it without monthly fee, requiring payment only for the bought content, it may have some success over time, but will it reach the Xbox Live success? I doubt it.