Kurt's Thoughts

I was reviewing a Powerpoint that a co-worker of mine put together and I noticed an interesting slide in there with some stats that I wasn’t aware of.  It was on Xbox Revenue Streams… i.e. where does Microsoft get and/or plan to get it’s revenue from on the Xbox product line.  Here it is:

1. Game license revenue
1. 4.5 games sold per console in the US
2. Xbox library = 825 games and growing
2. Downloadable content
1. 24 million pieces of content downloaded from XBox Live
2. Content providers = CBS, Viacom/MTV, Paramount, Warner Bros, Lionsgate
   (and he left out several others including NBC, ABC, FOX, Comedy Central, UFC, WWE, etc.)
3. Subscription fees & points
1. 57% of Xbox 360 owners connect to Xbox Live, up from 10% of XBox "Original" owners
2. 3 billion hours of online gaming
3. 6 million members by June 2007
4. Add-on hardware
1. 2.9 accessories sold per console in the US

And then there was this slide:  FUTURES (as in future revenue streams)

1. Massive
2. Microsoft Casual Games/Games for Windows
3. Live Anywhere
4. Microsoft TV

I’ll explain these latter 4 in another post when I have time but it is very exciting from a Xbox-supporter perspective, because the more money Xbox 360 makes, the more successful it is and its success feeds on itself in a vicious circle.

1. Microsoft provides seed money to Xbox to R&D consoles & games.
2. Consumers initially buy consoles & games.
3. The more games & consoles are bought, the more developers are willing to invest in and create more games.
4. The more games availble, the more valuable the console is to consumers.
5. The more consoles & games sold, the more profitable Xbox is to Microsoft
6. The more profitable it is, the more money Microsoft invest in Xbox to grow its capabilities for consumers, to make developers more powerful, and to compete to stay ahead of other consoles.
7. Consumer buy more games; developers write more titles
8. Go to step 3.