Xbox Update Helps Boost Microsoft Revenue Growth

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The goal is to make the Xbox more than just a device for playing games, and to turn it into something that people use whenever they turn on their TV. (Photo: Josh Smith)
The goal is to make the Xbox more than just a device for playing games, and to turn it into something that people use whenever they turn on their TV. (Photo: Josh Smith)

BUSINESS

  • Microsoft releases update to Xbox 360 with improved interface and enhanced voice controls
  • Xbox 360 outsold Wii by nearly 400,000 units in November
  • Microsoft sold just under 1 million Xbox 360 units during Black Friday week

Microsoft has released an update to the Xbox 360 that provides the console with an improved interface and enhanced voice-recognition controls. The changes take the Kinnect Hub of the current interface to the next level, providing users with greater ability to control the console with their hands and voice.

Visually, the interface now contains many elements already found on Windows phones and planned to be included in Windows 8. It also integrates Bing, the Microsoft search engine.

The update comes with a new cloud-saving feature, making it easier for users to access their profiles and games from wherever they have an internet connection. Cloud-saving gives Xbox Live one of the few features it was lacking compared to Sony's PlayStation Plus, although Microsoft has still not yet equipped its services with a browser.

It does have a YouTube app, however, which could give users at least some of the functionality they may seek from a browser.

Subscription Services To Provide Additional Revenue

Although the update itself is free, it could still help increase revenue for Microsoft. Many of the services it proposes require users to sign up with Xbox Gold, a subscription service that currently costs $60 a year.

Some third-party apps and services from Microsoft content partners, such as Netflix or Hulu Plus, require their own subscription as well. These companies will later be joined by the likes of HBO, Verizon Fios and Comcast Xfinity, allowing Xbox users to enjoy content from channels like Comedy Central.

The goal is to make the Xbox more than just a device for playing games, and to turn it into something that people use whenever they turn on their TV.

Xbox Sells 400,000 Units More Than Wii in November

Already the figures are looking good for Microsoft. According to financial services firm Wedbush analyst Michael Pachter, in the US the Xbox 360 outsold its closest competitor the Wii by nearly 400,000 units in November, selling 1.44 million units compared to 1.05 million units for the Nintendo device.

Sony's PlayStation 3 sold 0.75 million units over the same period – just under half the number of Xboxes sold.

For Microsoft, these sales figures show a 5% increase on the same month last year. PlayStation 3 sales also rose during this period, by an impressive 41% compared to November 2010, while Wii sales fell by 17%.

Microsoft recently announced that it sold just under 1 million Xbox 360 units during Black Friday week alone, making it the best week ever for the console.

Key Statistics – World Video Game Market (source: IDATE research)

  • The world video game market (including revenue from software as well as hardware) is set to be worth more than €52 billion in 2011, up €0.2 billion (or 0.4%) compared to 2010.
  • Although revenue has declined slightly from home console games, this is offset by the impressive performance of the online games and mobile phone games segments, which have proved particularly dynamic.
  • The sector is predicted to see healthier growth from next year onwards, with total revenues estimated to rise by around 5% in 2012 and to reach double figures in 2013 and 2014.
  • During this period (2012-2015), a new generation of home consoles will be released. The Wii U is already set for a 2012 release, and other console manufacturers must surely be set to follow.
  • Just under 40% of revenue from video games comes from digital distribution or online practices (such as selling items, and so on).

By S. W. Mudie for
S. W. Mudie has been working in and writing about technology for over ten years. Originally from Scotland, he now lives in Paris, France.

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