Product sales outpace subscription fees on Xbox Live

Microsoft has always led the video game pack when it comes to online integration of its console services. But it recently turned a particularly impressive corner.  

For the year ending June 30, sales of online products, such as movies, TV shows and downloadable game levels, were higher than revenue generated by subscription fees. Together, the company estimates that revenue for the Xbox Live service topped $1 billion.

Approximately 25 million people subscribe to the “gold” (or paying) level of Xbox Live, bringing in revenues of roughly $600 million. A new Bloomberg report suggests the business generated over $1.2 billion in sales last year – and Xbox chief operating officer Dennis Durkin confirmed to the service that product sales led the way.

Assuming the numbers are right, that’s a better than 35 percent improvement over the previous year – and it solidifies Microsoft’s place in the industry. (Sony, which for years, publicly ridiculed Microsoft for asking customers to pay $50 per year for the service, recently launched its own pay service.)