Xbox Live: six million users

[expletive]

Well, MS needs to break down the revenues between Gold subscriptions and microtransaction payments.

And again, between Gold microtransactions versus Silver microtransactions.

The number of people who log on is no more meaningful than the number of people who use Google but never click a single ad or sponsored research result.

The thing about some pay DLC is that it could cannibalize shrink wrap sales.

So is it right to call it a part of online revenues?

Not sure i understand your point. If MS wasnt charging for XBL, in any flavor, would this number mean any less? Since they are charging for Gold, this number holds more weight since a portion of these users are actually paying to be on live. So in the grand scheme, a mix of 6 million gold and silver users on XBL, is certainly more relevant than 6 million on another service where there are NO paying customers isnt it?

Your google analogy is flawed, with google you need do nothing but type the url into a browser window to use it. With either flavor of live there is a sign up process, so there are barriers to use on Live that dont exist on the regular ol internet.

 

[Shifty Geezer]

Who cares? If they logged in, and downloaded content, they have made use of the Live! service, and shown that they value it.

That's not necessarily true though. I've downloaded software and then gone on to not use it. That software company could quote '10 million users' but it could be most were like me, tried it out, and didn't come back. Similarly I once bought a copy of a photography mag. Does that make me a reader of the magazine, if I've only done it once? The fact someone's used a service doesn't mean they value it. I've eaten at restaurants before where I haven't valued it, shown by my never returning. It's the return customer count that shows people who value it.

70% of online users have downloaded something. What proportion of those are making regular, or at least not infrequent, downloads? And what proportion got their XB360 home, registered an account, downloaded a couple of movies, and said "not that interested," and haven't downloaded anything since? Similarly for PSP's conectivity, what %age of users have downloaded one demo or trailer just to see what that feature does, versus what %age download to PSP fairly frequently?

The best measure here is a basic 'Divide Total of Downloads over Number of XB360s' to get a rough idea of an online 'attach ratio' for downloads, and hope future buyers have the same usage profiles as early adopters if you're going to predict long-term forecasts!

 

[wco81]

How is breaking down their paltry XBL revenues tantamount to releasing source code for Office and Windows?

My point with the Google analogy is that you have to monetize the traffic. MS has made it a point of making money off online gaming.

So a raw figure doesn't tell us much about how successfully it's converting that traffic to monetary transactions.

When they announce "we have 6 million XBL users" they're pointing to this number as a part of the value proposition for their console. But again, it would be more meaningful to know what percentage of those users are paying and for what.

It's their prerogative to keep the breakdown proprietary. Apple doesn't break out how many iPod Nanos they sell versus Shuffles or whatever, they just give a raw number, average selling price and people derive the approximate percentages and can guess at the breakdowns in each category.

MS hasn't even released an overall raw number for XBL revenues. I'm just saying it would be nice to have some idea, since they stated a goal of getting 50% of the user base as paying XBL customers, to see what progress they've made towards that goal.

 

[Tap In]

some of you guys are a riot

 

[crystalcube]

attach ratio is not a good measure for d/l service either. Just the total number of download is good enough. Lets say if they regularly have 1 Million d/l per month then it does not matter how many were done by regular subscriber and how many subscribed for single download.

A better measure is growth of total d/l over a period of time. For revenue/profitability one would look at how many are paid , etc. But from gaming community perspective a steady growth in d/l and number of hours played is sufficient.

 

[expletive]

How is breaking down their paltry XBL revenues tantamount to releasing source code for Office and Windows?

My point with the Google analogy is that you have to monetize the traffic. MS has made it a point of making money off online gaming.

So a raw figure doesn't tell us much about how successfully it's converting that traffic to monetary transactions.

When they announce "we have 6 million XBL users" they're pointing to this number as a part of the value proposition for their console. But again, it would be more meaningful to know what percentage of those users are paying and for what.

It's their prerogative to keep the breakdown proprietary. Apple doesn't break out how many iPod Nanos they sell versus Shuffles or whatever, they just give a raw number, average selling price and people derive the approximate percentages and can guess at the breakdowns in each category.

MS hasn't even released an overall raw number for XBL revenues. I'm just saying it would be nice to have some idea, since they stated a goal of getting 50% of the user base as paying XBL customers, to see what progress they've made towards that goal.

At this stage of the game it doesnt necessarily have to equal dollars, the membership is far more important. In order to get premium content on the service, MS needs to be able to say "hey, we can give you access to 6 million people online and on a closed box system, 80% of which are 18-34 year old males."

They need to make this platform enticing for the content owners first and then the content will follow. The 3 things, imo, that content providers want to see are: membership numbers, demographic, and drm. Those 3 are the reason why the itunes store became viable to labels, they saw the numbers and saw an oportunity to make money. MS is still at the point where they are attracting content, rather than having to count money on how much they made in DLC. We're just seeing the tip of the iceberg with consoles online.

 

[crystalcube]

If I am a content provider I definitely would like to know how many will pay or my content. You cant compare Live to iTunes because iTunes is a fully paid service.

 

[Johnny Awesome]

These are VERY impressive numbers for MS. There is a huge upside as they convert Silvers to Golds and sell more and more downloadable content and push attach rates through the roof with demos. Capcoms games have a 10% attach rate on X360 because of Live. That's HUGE.

 

[assen]

If I am a content provider I definitely would like to know how many will pay or my content. You cant compare Live to iTunes because iTunes is a fully paid service.

If you are content provider you are most probably treated differently with sensitive marketing data than chattering fanboys on forums are.

 

[scooby_dooby]

I'm just saying it would be nice to have some idea, since they stated a goal of getting 50% of the user base as paying XBL customers, to see what progress they've made towards that goal.

Pretty sure you are remembering wrong here.

The point you continue to miss and/or ignore, is that XBLive serves many purposes other than generating revenue from sales or subscriptions. All the free content adds a ton of value to the hardware itself, demo's, music video's, trial games, etc.

So, MS has not just "made it a point of making money off online gaming", they have also made it a point to subsidize a wide range of FREE services, which add value to their console. Therefore, the total number of consumers logging in, and using that free content, is an extremely interesting and informing number. It gives you some idea how much consumers in general value these offerings.

 

[wco81]

At this stage of the game it doesnt necessarily have to equal dollars, the membership is far more important. In order to get premium content on the service, MS needs to be able to say "hey, we can give you access to 6 million people online and on a closed box system, 80% of which are 18-34 year old males."

They need to make this platform enticing for the content owners first and then the content will follow. The 3 things, imo, that content providers want to see are: membership numbers, demographic, and drm. Those 3 are the reason why the itunes store became viable to labels, they saw the numbers and saw an oportunity to make money. MS is still at the point where they are attracting content, rather than having to count money on how much they made in DLC. We're just seeing the tip of the iceberg with consoles online.

I agree that makes sense if MS is trying to sell a lot of music and movie downloads, i.e. content which they don't own.

But do they really need to entice the owners of arcade games to license for XBL? These are simpler games which run on all platforms so I don't think they're as discriminating as the music and movie companies.

More importantly, what is the main revenue model of XBL, subscriptions or microtransactions? I'm sure MS would like to maximize both. However, that 6 million number is obviously meaningful to both models, but more to the subscription model.

You can't always just take PR announcements at face value. If for instance, 90% of that 6 million was Gold members, that would be a financially material piece of data. It would also be meaningful to consumers, in that they would know there is a large, sustainable community of online gamers, not just downloaders, on XBL. For some, that might influence their console purchasing decision as well as the decision on whether to pay for a year subscription.

 

[scooby_dooby]

It would also be meaningful to consumers, in that they would know there is a large, sustainable community of online gamers, not just downloaders, on XBL. For some, that might influence their console purchasing decision as well as the decision on whether to pay for a year subscription.

I don't buy this one iota, a consumer does not care if there's 2million users, or 6million, or 30million, at a certain point enough is enough, and there is no worry among consumers about XBlive not having enough members to create a sustainable community.

What we do know, thanks to these numbers, is 60% of consumers do care enough about accessing DLC, that they have hooked their machines up to the internet and logged in.

It also tells us 40% can't be bothered, which is a huge number, and to me, really draws Sony's decision to bundle a HDD with all machines into question.

 

[wco81]

A person who tries to play online on the Wii or the PS3, or even the PS2 for that matter, might find certain games don't have too many players online.

He or she might be more inclined to pay for XBL Gold if there's a chance there's more online players for the kind of games he or she wants to play online.

Maybe there aren't a lot of gamers in this kind of situation but there are some.