• Reuters.com, Thursday, May 11, 2006 10:30 AM

By and large, many analysts think Microsoft is off to a fresh re-start in the video game biz, having released its Xbox 360 a whole year before competitors Nintendo and Sony can bring their new products to market. Microsoft expects its early lead to be by about 10 milliona vast number indeed for the gaming market, which is currently estimated at 100 million game consoles in the U.S., according to NPD Group. Earlier this week, at E3, Bill Gates discussed his vision for XBox 360 and XBox Live, its online platform, saying he envisions a future of "Live anywhere" gaming that will allow Live users to play games and share messages between PCs and mobile phones. One thing is sure: at 3 million subscribers, who have to pay a $50 per year fee to play against one another, XBox Live needs more users--especially if it's serious about serving dynamic in-game advertisements in the near future. You can get more than 3 million unique users at your standard casual gaming portal. That said, the company expects that number to double by May of next year. One analyst said there's no question the company loses money on XBox Live, which costs more to maintain than is currently made from annual fees and micro payments from downloads. However, the analyst added that if the next-generation consoles sell 150 million total units (which would take several years), and Microsoft gets 20 percent of that, then Live would become a revenue generator.

Read the whole story at Reuters.com »