The sale of a 1 year Gold membership can be compared to the sale of one first party game. Nothing more or less. What I mean by this is that those Live sales are nothing different to Microsoft than the sales of Gears, Halo 3 or their other big sellers. They all have
to contribute towards reducing the losses.

It's amazing that they don't have to report all of these billions of dollars they made on their financial reports. Or do you think these billions are the reason that the E&D division(xbox, zune, surface pc, embedded os) was able to post a 300 million dollar profit last quarter?

Yeah, Sony made a big blunder pimping out free PSN. These kind of services look very easy from the outside but in truth are a management nightmare - and they cost a lot money to run.

@Reverie - Gears of War is a third party exclusive, Xbox 360 live gold is a subscription service and the expectation is that it will be renewed every year for the most part. The profit differences are incomparable.

@dbot - I said WILL make billions, it takes time for the money to trickle in and the revenue to ramp up. Also the Zunes probably losing money, and the others are quite small fries in comparison to the games division.

@Xboxlive arcade IIRC they make 35% on the third party games, so thats about 18 million per year... quite small but when it ramps up further it'll probably be more like $40-50 million with a greater selection of quality titles and increased userbase.

@dbot the assertion wasn't that they've made billions but that over the duration of this generation they will, and considering the gold membership subscription, paid content etc I wouldn't be surprised if they managed to make a lot of money.

 no.

1. Xbox Live has no game developer, publisher, retailer or something. Every single cent is for MS only.

2. You are paying 60Dollar a year, not once and never again like for a regular game. (excluding a sequel, this has to be developed again)

3. The payment for Arcade Games, Movies etc. can't be compared to a one-time-payment for a game

4. It is very likely that a gold-member will continue his membership after a year. Just because it is worth it.

I belive MS makes more on each live sale than the sale of a game. With live the money goes straight to MS, with a game it is divided by the game store, publisher, developer and MS.

Edit: Derty beat me to it.

1,000,000,000 = Billion

1,000,000 = Million

400,000,000 = 400 million

260,000,000 = 260 million

But how long can MS convince people to pay for Xbox-Live when Nintendo and Sony-Gamers has only play without paying.

By the way, a friend of mine has his xbox for over a year and he doesnt pay for his gold account because of the free-month he got with many games.

Billions? whoah, I dunno about that...

Look, XBL has been a boon for the 360, without it, teh 360 would have just been another XBOX, lame lame lame. But, now the PSN is coming up and imho improving much more quickly with all of the add=ons like home and playtv or whatever else they are adding. The thing of it is though, is that MS can add a home knock-off anytime that they want, heck they are already probably working on this right now. I think that we will soon get to the point where the difference between the Xbox brand's online services and the Playstation brand's services will be about the same.