X-Box: One Year, One Billion Dollars

Posted on February 1, 2011


I loved, Loved, LOVED my Atari 2600 video game system. I played incessantly. It was a perfect way to kill off Michigan winters.

Then, of course, there are also several handheld Mattel sports games and Merlin in my geeky past, but I digress. 

Being in on the ground floor of video gaming it’s no surprise to me what a big business it’s become. What is hard for me to fathom is the growth of online collaborative gaming like Xbox Live or World of Warcraft.

But here’s a statistic that puts the whole thing in perspective: over the last 12 months Microsoft’s video game division – which might as well be called the Xbox division — has made over a billion dollars. That’s billion with a B.

Prior to 2008 when online gaming really started to pick up steam, Microsoft had lost money on the Xbox consistently and were not talking about just missing break even. That billion in profit is only a down-payment on previous losses. But now they are headed in the right direction with no stopping in sight.

While it feels like more online game platforms seem to cater to men than women, the popularity of games Farmville and Bejeweled, which are more gender neutral, speaks volumes about the universal appeal of playing games online.

Yesterday I talked about how arena concerts that brought big chunks of your audience together in one place for a shared experience may be on their way to extinction. If you want to find a new place to bond with significant chunks of your audience, it might be time to explore online video games. 

At the very least take the time to learn about and understand this world. If you are not a gamer at heart, it might be tempting to write it off as a giant time suck or a fad that only a few people take part in. 

When that happens just think about the billion dollars Microsoft has put in the bank over the last year.