Photo: J.VillaretePhoto / Flickr

Bobby Kotick recently expressed his displeasure at contributing a central experience to Xbox Live without seeing any financial payoff from the system. Now that information regarding just how much money Microsoft are making from Xbox Live subscriptions has emerged, we can’t say we blame him.

Over $1 billion in annual revenue

Through piecing different pieces of information, Gamesindustry.biz (free subscription required) has discovered that Microsoft make more than $1.2 billion (£790 million) annually on a combination of Live subscription and downloadable content. Microsoft now have over 25 million XBLA subscribers and more than 50 per cent of these subscribers have a gold subscription – accounting for around $600 million (£395 million). In an interview since, Xbox COO Dennis Durkin revealed that more than half of the total Xbox Live revenue came from digital downloads, adding at least another $600 million (£395 million). That’s a whole host of money we spend on DLC, Xbox Live Arcade games, themes and, shudder, Avatar fashion accessories.

Buy smarter, please?

Photo: Dan Coulter / Flickr

Most Xbox Live subscription and Xbox Live Arcade points are bought directly online due to the ease of simply punching in a few credit card details and processing a transaction. Savvy gamers have discovered, though, that if you buy Xbox Live subscription cards and if you buy Xbox Live Arcade points from retailers online, you get them for less than the price Microsoft itself charges. Some online retailers even email the vouchers to you instantly, so that you don’t have to wait. It just makes sense and, by the calculations above, Microsoft don’t need anymore of your Xbox Live subscription money, now do they?

Years down the line, even though many gamers are still not happy with having to pay for the XBL subscription, do you think it’s been worth your money? And which titles dominate your gaming time?

Photo: Microsoft

As we get closer to the release of Windows Phone 7 Series this October, Microsoft’s slow burn breadcrumb marketing campaign is gathering steam. The latest announcement the company has made is that there will be a huge focus on porting Xbox Live Arcade games over to their incoming mobile OS.

We sort of knew about this

Microsoft earlier this year showed off a remarkable demo of the same game being played on a PC, an Xbox 360, and a Windows Phone 7 smartphone. The impressive part of it all was that the game had 90 per cent identical code, which implies the porting would be quite simple.

XNA framework the enabler

This is possible because Microsoft’s XNA framework is responsible for powering the gaming behind both Xbox Live Arcade and Microsoft’s new mobile OS. Head of Consumer Marketing for Windows Phone 7, Oded Ran, admitted Microsoft are deliberately courting developers in their hopes of having Phone 7 be a premiere gaming platform. He pointed out that there were 4 million Xbox 360s compared to 2.5 million iPhones in the UK, somehow implying the console ubiquity (and installed developer based) will allow Microsoft to transfer the talent pool to Windows Phone 7 Series development by leveraging the XNA framework.

What do you make of this?

Photo: Microsoft

Oded Ran did add that this initiative was aimed specifically at Xbox Live Arcade games and not bigger releases like the Halo 3 titles of the world.

As the months count down toward the imminent release of the Windows Phone 7 Series, one can’t help but be curious how it’s all going to pan out. Many in technology have already ruled out Microsoft’s potential to win big, but if the quality of Xbox Live Arcade games is anything to go by, the console will immediately have an ace up its sleeve. Furthermore, Microsoft’s recent fortunes (and critical appraisal) with its Xbox 360 console, Windows 7, and Office 2010 indicates people really shouldn’t rule Microsoft out just yet.