Xbox Live earns over $1 billion

If there were any doubts that Microsoft has a Scrooge McDuck style vault filled with gold coins that the executives swim through each day, a report from Bloomberg News just erased them. The financial report estimates that Xbox Live has had a banner year, generating over $1 billion in revenue, a first in its eight year existence.

While Microsoft won’t officially release numbers until its earnings call on July 22, Sarah Friar, financial analyst for Goldman Sachs, estimates Xbox Live raised its sales from $800 million in 2009 to $1.1 billion in 2010. That estimate is based on half of the 25 million Xbox Live members paying for gold membership, which is $600 million in itself. The remainder is made up by sales of the platform’s Avatar items, movies, and other downloadable content.

Dennis Durkin, Xbox’s Chief Operating Officer, told Bloomberg that the additional revenue is made possible by supporting a game once it leaves the retail market. “The old playbook of ‘launch and leave’ is a relic of the past,” he told Bloomberg. “Today with Xbox live, it’s now about ‘launch, sustain, retain’ by continually adding new content that enhances the original experience.”

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