03/28/2008 02:45 am ET Updated May 25, 2011

Microsoft Xbox Live: Actually A Real Business Now

Microsoft (MSFT) devoted most of its CES presentations to a sexy but small sideshow--the Entertainment and Devices division--but some of the Xbox statistics were impressive, especially in light of Microsoft's efforts to strengthen its position in The Battle for the Living Room.

E&D head Robbie Bach announced that Xbox Live hit 10 million subscribers ahead of schedule. Most of these subscribers pay $49 a year, which suggests that the recurring revenue portion of Xbox's revenue is approaching $500 million a year. These are small numbers relative to Microsoft's primary profit and revenue engines--Windows and Office--but they're significant.

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