No way there's 23 million Gold subscribers - it's 23 million Gold/Silver with a MAJORITY paying subscribers - i.e. > 11.5

Shareholders should consider what Xbox and Live do for the mother brand and the possibilities ahead :

Xbox & Live reach an audience quite different from that of their usual products and it's actually getting that new audience a very different image of itself (and so much more fun)

As for the possibilities ahead : PCs are still something individuals use, while the Xbox aims to be found in the living room for all to enjoy. Integrating common functionalities among windows and xbox environments such as instant webcam coms, content exchange, and standardization of both interfaces would be long-lasting lock-ins.

Personally I estimate that a little over 50% of X360 owners are connected to Xbox Live, and these are the 20 or 23 million, but only a lil over half of these actually pay for Gold.

So maybe there are a little more than 10 million Gold members who pay $35 on averge per year (see Squill's estimation for the $35).

So I beleive the total revenue is no more than ~$400mill annually from xbox Live subscriptions.

The 23 million live users-number is 5 months old though (CES 2010). And I think it leaked that about 60% of the users are gold members.

• I think the Halo Reach Beta with 2.7 unique users (and just ranked on no. 6 on the weekly XBL charts)
• The best selling MW2 mappack
• The great sales for Battlefield Bad Company 2 (2.17 million so far)
• The 600k players that played Halo 3 in the past 24 hours (!!!)
• The 1600 point card being the BEST sellinge acessory in the US for two months in a row according to NPD

All of that really shows that Xbox Live really is massive. I think 13 million paying members is easily possible.

And Squill's estimation:

$35 might be right, nobody knows for sure except MS. But consider this:

1. exchange rates ( I pay up to 60€ for one year = $73)

2. You calculated everybody bought the cheapest subscription for one year and nobody bought 3 months subscriptions or something like that. The 3 months XBox Live gold card is more expensive for one year.

I can't wait what might be next for Xbox Live. E3 will show us some new features that will drive the Xbox Live sales. Twitter, Facebook, Sky, Canal +, Netflix, Last.FM, Zune marketplace are really nice features. Imagine what a partnership with ESPN could be like... For Xbox Live, sky is the limit.

I love you man, you're such a big fanboy. But I mean that only in a good way!

I hope your numbers are right of course.

More than 10 million people are on the leaderboards in MW2 on the 360, so I'd imagine there must be well over 10 million gold members

How can being a fanboy be a good thing.

And for the XBL stuff I forgot: MS sells subscriptions online for the same price. Without any retailer.

Isn't Mac Office oddly part of this division as well? That must be wildly profitable.

Maybe it is 23m Gold members but they are counting anyone who is Gold during a 12 mo period. Get a free mo. or 3 mo. with a game or hdd and you contribute to the 23m but not the bottom line. I sign up when a specific game I want to play comes out, otherwise it's back to Silver. I can't be the only one.

Idk but $1B seems really high even before upgrades, maintenance, employees etc. They must make good money off millions of dlc as well. Even .5B profit on xbl would mean they are making more on live than 360 sw and hw combined. Accessories must be profitable too. Would it kill them to give us specifics?

Ok, I stand corrected.  What I will say is embarrassing, besides myself doing this, is an individual using Michael Pachter as a lead in to get people to read an article on financial problems by Microsoft (shake up os managament) with him saying it is otherwise.  

Anyhow, replace Pachter with the other analyst who said that, and that is also embarrassing.