Microsoft Reveals XBLVM Revenue

Posted by Mehar Gill on August 4, 2008 
Filed Under: Downloads, Format War, Rental, Xbox 360, XBOX Live Marketplace

MCVUK interviewed Don Mattrick and John Schappert, the interview itself deals with general Xbox related stuff. Later they start going into the Xbox Live Video Marketplace, Schappert reveals that the Xbox Live Video Marketplace accounts for 1/3 of the revenue brought in from Xbox Live alone. He then goes on to say:

We have a bigger story than maybe people thought and there’s a lot more we can do. That’s the challenge we have to pick up and run with,”

It’s our goal for that message to come across, that Xbox brings more entertainment to your television than any other device. If you want to watch a TV show, if you want to watch a movie, play an arcade game, play a retail game or join a party – people can do that. That’s our goal – turn it on, there’s always something on there for you.

So what do you think of that 1/3? Is it to high, to low? How much of an affect would this number have had on Microsoft’s decision to allow a direct competitor, Netfix, onto the system despite the free Netflix alternatives already on the system. At E3 a few weeks ago Microsoft had also stated they were the biggest distributor of digital video content in terms of revenue. How many people does that account for? Microsoft had stated that their are over 12 million gold subscribers are already on the system, since Silver members also have the ability to purchase content there would probably be about 4-5 million of them, bringing the potential users to 16-17 million.

Believe it or not outside of America the selection is crap, Ive only ordered one movie from the service, and that horrible movie was called “Mamma’s Boy”. Why did I order it? Because I wanted to try out the service for myself, the service worked fine the file size was about 1.2GB, it took 15-20 minutes to complete the download which was much faster than I originally thought. At least Star Trek V: The Final Frontier is exclusively in HD on the Xbox Live Video Marketplace.

Related posts:

  1. E3 08: Microsoft’s Announcements
  2. Sony To Launch Video Download Service
  3. Shane Kim: “Blu-ray Won’t Take Off”
  4. HD Netflix Streaming Rolls Out With New Xbox Experience
  5. Digital Downloads Update September 5th 2008


11 Responses to “Microsoft Reveals XBLVM Revenue”

  1. bigdmelt12 on August 4th, 2008 4:21 pm

    Thats unfortunate outside the US, because here in Florida, jumped on and watched zodiac the other day because the hd version is too expensive for my taste. 720p download took about 40 minutes but well worth it…great picture for a download.

    ps. Mehar, the shallow grave release should be coming up soon on

  2. Belard on August 4th, 2008 9:19 pm

    If we go by numbers, that’s about 12million possible Xbox members in the USA. But here is the thing, most xbox users love to say “xbox is a game console 1st!” and with about 90% or more xboxs being nothing more than 20GB models, not many of them are equipt to handle a lot of downloads.

    How much of the 20Gb is the OS/system files? Then you game saves, game downloads, patch files, MP3s, Videos and now add 1.2GB low quality video? (A typical movie will use 2-3GB of DVD space) And adding HD 720p video would be quite a bit larger… 5-10GB?

    The features that MS is boasting about, the xbox cannot do with its current user base without expensive $120 add-ons and the lack of ANY HD media drive. 20~40mins to download a movie? Hey, while I drive by a Best Buy tomorrow, I’m going to pick up Battlestar Galatica Seasons 1, 2, 2.5 for $20 a pop! That’s about 30-35hrs of high quality video. It’ll take me 5-10 mins to walk in and walk out. NO HD to buy, no service to sign up for, etc.

    The PS3 is still more suited for total home entertainment that plays games just as good as the 360, but for a less overall price. No HD-DVD or Blu-Ray support for the Xbox360 regulates it to yesterday’s hardware. With the 360′s 33% failure rate – its user base is actually smaller than noted. Think about how many units had to be recycled, or how many users bought replacement system or an Elite to get the bigger drive. How much for a Blu-Ray add-on drive for the 360? The 360 looks like a console, its noisy, it has a power brick, would require more cabling for external drives, etc. The Sony PS3 is slick and more aimed at adults. The people who make and spend money.

  3. Bigdmelt12 on August 4th, 2008 11:34 pm

    i guess that is your personal preference. Microsoft could make everything real cheap with higher gigs much like the playstation, but they would rather not lie to their investors and save 3 billion dollars…

  4. Ironman195 on August 5th, 2008 5:42 am

    Looks like we have a Sony plant here. Seriously though, please stay on topic. Personally, I have downloaded about 10 shows (movies and TV episodes) from XBLAM and enjoy the service. Most of my downloads are in HD and they do lolok very good. It’s a great alternative to have. As for times it takes to download, I never really noticed it since I just queue up a few items to download and then play a game or watch something else that I have dowlnloaded before. @Belard -

  5. Mehar Gill on August 5th, 2008 8:43 am


    The SD downloads are actually pretty HQ for what they are, not HD of course but the transfers are pretty nice. 7GB of the 20GB HDD is dedicated to the Xbox itself (For the OS, Disk Cache, etc). Ive seen HD video that ranges from 1GB to 8GBs, its not that bad, its pretty easy to make room.

    You can’t say their is no media drive since their is the HD DVD drive, albeit it’s not internal, but its their. Surprisingly, Microsoft barely turns a profit on the Harddrives, give or take a few they get around $20 for the $120GB HDD, the retailers get more then they do.

    Microsoft doesn’t count “recycled” units into their sales figures, your last paragraph gave me a good laugh. If would be more cost effective for someone who already has a console to buy the HDD then buy a brand new console. The PS3 also has a power brick, the difference is their power brick is internal, I think I will get over the fact that one extra cable is added to my collection of cables behind my TV. My 360 really isn’t that noisy, it might be some times but overall it’s not as bad as people claim.

    You realize when it comes to overall revenue spent, online and in the store the Xbox 360 leads the charge, I really don’t know where you got the idea that the 360 is not aimed at Adults or that it is aimed at jobless adults. The PS3 sure is slick, I remember when I saw something just like it at Costco, it was called the “Foreman Grill”! (Sorry, I just had to say that!)

  6. Pete on August 6th, 2008 2:42 am

    Originally Posted By Mehar Gill
    Surprisingly, Microsoft barely turns a profit on the Harddrives, give or take a few they get around $20 for the $120GB HDD, the retailers get more then they do.

    You’re saying a nearly-17% mark-up on the drive is “barely a profit”?? Not a very convincing argument. You can pick up a 320gb internal for $150 easily for the PS3, without paying Sony any kind of “hard disk tax”. Interestingly, a 120gb will set you back around $50.

    Originally Posted By Mehar Gill
    The PS3 also has a power brick, the difference is their power brick is internal

    The definition of a power brick is that it is EXTERNAL. Try again.

  7. Pete on August 6th, 2008 3:06 am

    Ack.. my maths is terrible. It’s actually a nearly-27% markup.

    That’s based on the following;

    Drive and mounting costs: $75, MS add their $20 that’s nearly-27% markup
    Retailer: Adds $35 that’s nearly-37% further markup
    Barely a profit: My bottom it is

  8. Mehar Gill on August 6th, 2008 8:25 am
  9. Pete on August 6th, 2008 2:25 pm

    Crikey that’s crazy

  10. Mehar Gill on August 6th, 2008 5:18 pm


    Thats also not factoring in delivery costs, border taxes, etc so it could be less then $20 for all we know.

  11. NotNormal23224 on August 10th, 2008 12:47 am

    I have both a 360 and the PS3 and while Blu-Ray is great on the PS3 the 360 completely owns the video market otherwise, when it comes to rentals and digital distribution, heck even streaming (my 360 recognizes far more of my video files than my PS3). The good on the PS3 though is the user replaceable drive(boosted my PS3up from the 20GB drive I had to a 12GB), but on my 360 I do have a 120GB drive as well (hey MS fix that, let us roll our own drives!). YOur comments about video quality show a bit of ignorance that comes from never having actually used XBLM for video, the video isn’t low quality at all, it’s the same quality that Sony offers in their new store for both SD and HD, except for trailers which Sony puts in 1080P (actual “HD” downloads from their service are 720P, even for exclusive PSN content advertised at 1080P like Xam’d: Lost Memories)

Feel free to leave a comment...If you have not commented before, your comment will be held for moderation.
and oh, if you want an Avatar to show with your comment, go get a gravatar!