Xbox Live Is Microsoft's New Billion Dollar Business (And Activision Wants A Piece)

Microsoft's Xbox Live service has pulled in an estimated $US1.2 billion for the Xbox 360 maker, with annual Gold subscription fees and sales of digital content combined, according to Bloomberg. Good news for... Bobby Kotick?

According to Microsoft's Dennis Durkin, the Xbox's chief operating officer, sales of Live content like movies, TV shows, Avatar items and other downloadable content items have outsold Xbox Live Gold fees, estimated at $600 million from 25 million paying users.

Microsoft's partners, like Call of Duty publisher Activision, want to share in those revenues. Activision CEO Bobby Kotick claims its his company's games, like Modern Warfare 2, that are "driving a lot of the subscription interest and certainly hours of game play". Sound fair? If so, Rockstar Games, Valve and Epic Games may also want a slice of that pie, Microsoft.

Microsoft's Online Xbox Sales Probably Topped $US1 Billion [Bloomberg]


Comments

    I'm failing to see the connection here. Activision makes many of those non-live sales?

    Is this unfinished or what? Am I a drooling imbecile for not getting this?

      Not just you bud... I have no idea what the article is talking about except for the fact MS made a shitload of cash.

    I don't get it... no point made here.

    This pretty much shows a bad journalism in Kotaku.

    Nah mate, it just shows that Bobby Kotick wants more cash, that he feels is owed to him by microsoft as Call of Duty is driving xbox live subscriptions and the profits from the DLC and so forth.

      Correct... Bobby believes MS are only make alot of this cash because his games (eg:COD) are the ones bringing people to the service in the first place.

      Bobby really is a pain in the ass to all gamers!

    Fark off Activision. You're already introducing a p2p system with black ops, leave it at that.

    I can't see how you guys can't get it? The article is saying that Activision believes that games like MW2 and Call of Duty 4 are part of the reasons for the success of Xbox live DLC i.e. "Stimulus Package".

    Additionally people are playing MW2 online regularly and this accounts for the subscription revenue for Xbox live.

    Activision want to see some of this revenue. Preposterous claim, considering Microsoft own all the hardware and designed Live.

    But don't come on here Troll. Kotaku is an awesome website that's why you fools check it daily! Maybe you guys are actually all retarded and if that's the case, go back to school!

    So let me see if I've got this right. Activision would like a percentage of the profit gleaned from MS charging for Xbox Live Gold due to the fact that they believe their games are the reason for people paying for the Gold service in the first place. In other words they aren't satisfied with how much they charge for the game and any of the DLC they create (not sure what MS' cut on DLC is, if any).

    How would this even work, I know MS can easily track what games everyone is playing but would Activision receive money based off the amount of times their games are played? If it's a solid rate and someone is a hard gamer and plays different games online for up to 12 hours or more a day the amount charged by MS might not cover that players contribution to Activision. How much of the amount charged by MS goes to supporting the services they provide in terms of servers, updates and software evolution? This all stinks of a greedy hunger to get a slice of a pie that Activision is not entitled to.

    Yeah its pretty obvious what he is saying. He argues that Microsoft makes a heap of money off Activisions games via subscription fees and as such Activision should get a cut of it.

    What this may lead to is new subscription fees for Activision games.

    MS may have revenue of $1.2bn but how much do they spend on the R&D, maintaining the service and royalties/licences etc? I wouldn't know but I'd guess it will be in the $100's of millions.

    whats next will mr kotick attempt to sue the internet because people are playing his companys game son it

      Shhhh, you're just giving him more insane ideas!!

    I can't see if the article differentiates profit or turnover.

    How much of that money pays for bandwidth, servers, network support... etc?

      Is it the game that drove the platform, or the platform that drove the game?
      Maybe Mr Kotick owes Microsoft for establishing a consistent service that allowed his game to succeed to the levels that it did...

    Actually back when mw2 didn't have local searching I sold mw2 and unsubscribed my gold and purchased it on ps3 and have since bought all my games on ps3. So in my case microsoft lost money because of activision.

    And to think I thought Activison and Bobby couldn't get any more selfish?

    Ahh MS deserve every bit of that revenue. If it wasn't for their hardware, you wouldn't be rolling in dough yourselves. Last I checked games like COD4, MW2, World at War all sold better on the 360. GTA IV, Gears (obviously) among others also well better on the 360 because of Live.

    Team MS all the way! They earned that $ in their name.

    Well i only signed up to xbox live to play Modern Warefare. So he is kinda right.
    I have purchased the 2 map packs. The only other purchases i have made is XBLA games Shadow Complex and Trials HD.
    So microsoft isnt really providing me with any real content, other than a place to play my games online. And at $50 a year i'm ok with that.

    Why don't Activision want a cut from Sony? Probably because Sony don't charge for online play.

    It's funny that Activision are winging because someone else is ripping customers off, and they are not getting a cut.

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