Ahead of Microsoft's annual financial report for the fiscal year which just ended June 30th, comes speculation that the software giant's Xbox Live online gaming service has reached an annual revenue milestone of $1 billion USD. Bloomberg did some simple math, multiplying the number of confirmed Xbox Live users who pay the Gold level subscription fee (around 12 million) by the fee itself ($50 USD for one year), to come to a quick estimate of $600 million USD.
Next, Bloomberg factored in recent statements made by Xbox chief operating officer Dennis Durkin suggesting that revenue from both downloadable content and XBL Video Marketplace rentals were finally able to meet and even beat subscription revenue. That's got to be at least another $600 million USD, so put the two revenue quotes together and they arrive at a grand total of $1.2 billion USD in cash pocketed from XBL before any expenses. Goldman Sachs analyst Sarah Friar believes Bloomberg is not far off the mark as she estimates sales of around $1.1 billion USD.
Microsoft reported revenue of $800 million USD for Xbox Live in the previous fiscal year before last. Durkin attributes any Xbox Live sales growth to a mantra of "launch, sustain, retain", meaning it's all about adding new content and features to the service.
The article was astute in gauging response from Activision, which considers Xbox Live to be the only other name in town boasting a lucrative online multiplayer business. So lucrative in fact, that the publisher believes it really ought to be entitled to getting a bigger slice of online revenue from Microsoft thanks to the sheer popularity of Activision's titles (i.e. Modern Warfare 2) on XBL.