Platform or not, Microsoft’s Xbox business is booming

Next week is the big E3 video-game convention, and Microsoft’s Xbox team this morning kicked off the competitive jockeying by releasing a new slate of statistics to demonstrate the momentum behind its Xbox 360 console and Xbox Live online service. Xbox Live now has nearly 35 million active members, the company says, and the Xbox 360 has reached cumulative sales of 55 million units.

It’s a matter of pride for Microsoft, and not just about video games.

Google CEO Eric Schmidt made headlines earlier this week by dismissing Microsoft’s role as a provider of consumer technology platforms, saying that the Xbox business doesn’t count because it’s not a platform at the “computational level,” as he put it. But Microsoft sees the Xbox business as proof that it can stay relevant in the consumer world, particularly as the Xbox continues to expand into new areas of digital entertainment.

The nearly 35 million Xbox Live members cited by the company today represent an increase of 40 percent from the approximately 25 million members reported by the company a year ago.

Microsoft didn’t break the figure down into Silver (free memberships) and Gold (paid subscriptions). The company also didn’t say if it has seen a boost in Xbox Live members as a result of the extended outage of the PlayStation Network following the high-profile online attack against the Sony property.

In console hardware sales, Microsoft said it believes the Xbox 360 has “changed the tail” of the typical hardware lifecycle with big gains in sales in the fifth and sixth years of its life.

The company released the chart below to illustrate its point, showing how the Xbox 360 is rising at a time when consoles typically start to decline. A big part of the new momentum can be traced to the release of the Kinect motion controller for Xbox 360 last fall.

Keep in mind that the numbers above are U.S.-only. And with more than 85 million Wiis sold worldwide, Nintendo is still the king of the current console generation on a cumulative basis.

That said, Microsoft’s Xbox 360  has been fending off the PlayStation 3 and gaining on the Wii on the worldwide level — posting sales of 2.7 million units in the most recent quarter, for example, compared with Sony’s sales of 2.1 million PS3s, and Nintendo’s sales of 1.4 million Wiis (PDF).

  • Guest

    Congratulations to Microsoft for creating the world’s most innovative entertainment platform! Until the “GooStation” comes out, Eric Schmidt and his family will turn to Xbox 360 first.

    • Anonymous

      I like the Google quote ” Xbox business doesn’t count because it’s not a platform at the “computational level,…”” 

       Yeah, and neither are any of the google powered net TV boxes or the google powered TV’s that your foisting on people there Eric Schmidt

  • Guest

    Another decade and it may even become profitable over its lifetime.

    • Anonymous

      you really don’t know anything about the xbox do ya?

      The console’s profitable for a few years now.  And when you add in all the other goodies, MS is making bank on it.

      • Guest

        profitable for a few years now != “over its lifetime”.

        Critical reading is an acquired skill. You could use more practice.

        • Guest
          • Guest

            No, it isn’t. From your own link:

            “Over its lifetime, the business segment containing the Xbox is down more than $5.5 billion — not including the cost of acquisitions such as the 2002 purchase game developer Rare, which cost more than $300 million.”Read more: http://www.businessinsider.com/next-xbox-may-be-profitable-on-day-one-2011-4#ixzz1OFvuhapv

          • Guest

            Xbox 360. Two thousand two predates Xbox 360.

          • Guest

            The topic was the Xbox business overall, not a particular model. The business overall is unprofitable over its lifetime, despite recent profits. And there’s nothing in your link that proves it’s been profitable even over the narrower lifetime of 360.  360 was released in 2005. Losses continued right up through 2009.

          • Guest

            I guess we’ll just have to agree to disagree. Xbox 360 is indeed profitable over its lifetime (keep binging until you find the answer) but Xbox is not. I believe it’s best to keep looking forward, mindful that progress can be costly.

          • Guest

            You could convince me by simply providing a decent reference that backs your claim. But apparently you can’t, hence the Bing wild goose chase.

            Nothing wrong with looking forward. But “those who ignore history are bound to repeat it”. And the history of Xbox (360 inclusive) is failure.

          • Guest

            If you’d like me to do some research for you, please have your assistant call my scheduler. My rates start at $250 and work on a sliding scale. Financing options are available to those who qualify.

          • Tyron

            That thread was hilarious!

          • Tyron

            That thread was hilarious!

          • Tayeule99999

            For 100$ an hour, I can refer you to a therapist who will help you work your ego issues.

          • Guest

            You could convince me by simply providing a decent reference that backs your claim. But apparently you can’t, hence the Bing wild goose chase.

            Nothing wrong with looking forward. But “those who ignore history are bound to repeat it”. And the history of Xbox (360 inclusive) is failure.

  • NitPicker

    Minor nitpick – the article says Schmidt is the CEO but he’s now just the Chariman of Google.  Sergey Brin or Larry Page is back in as CEO, I think…

  • Anonymous

    I checked facebook statistics at http://www.facebook.com/note.php?note_id=94523840758

    Chrome accounts for less than 2% of facebook usage, and more than 60% of usage is at PC level resolution (> 1024×768).

    In short, Microsoft not relevant among consumers is just perception.