Microsoft has always led the video game pack when it comes to
online integration of its console services. But it recently turned a
particularly impressive corner.

For the year ending June 30, sales of online products, such
as movies, TV shows and downloadable game levels, were higher than revenue
generated by subscription fees. Together, the company estimates that revenue
for the Xbox Live service topped $1 billion.

Approximately 25 million people subscribe to the “gold” (or
paying) level of Xbox Live, bringing in revenues of roughly $600 million. A new
suggests the business generated over $1.2 billion in sales last year
– and Xbox chief operating officer Dennis Durkin confirmed to the service that
product sales led the way.

Assuming the numbers are right, that’s a better than 35
percent improvement over the previous year – and it solidifies Microsoft’s
place in the industry. (Sony, which for years, publicly ridiculed Microsoft for
asking customers to pay $50 per year for the service, recently launched its own
pay service.) 

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