Xbox Live Arcade "past tipping point"

By Wesley Yin-Poole Published 18 October, 2010

Less competition on PSN but fewer users.

The Xbox 360's download games service Xbox Live Arcade may have passed its tipping point, one of the platform's most successful developers has said.

According to Foundation 9, the parent company of the developers behind download games OutRun Online Arcade, Super Street Fighter II Turbo HD Remix and Deadliest Warrior: The Game, around 30 per cent of Xbox 360 owners are buying games through XBLA.

"Certainly XBLA is past tipping point now," CEO James North-Hearn told Eurogamer.

"We estimate there are about 16 million game purchasers out there currently. The 360 numbers are somewhere between 40 to 50 million, depending on who you listen to.

"It's pretty healthy. 30 per cent of the hardware base is not only online and using Xbox Live, but it's all those and buying games. It's got to be encouraging for that type of distribution going forward."

Xbox Live is currently a billion dollar business, buoyed by sales of movies, avatar gear and game add-ons.

According to Microsoft about half of XBLA's 25 million users paid an annual fee to play games online in the year ended June 30.

But what of Sony's rival service the PlayStation Network?

"Clearly with PSN the market's not as big and therefore the data is not as established," North-Hearn said.

"Even though it's a smaller user base, and even though it's generally accepted as currently not being as successful or as popular, it's definitely growing. We can see that.

"There's less competition on PSN but currently a smaller user base."

As of June this year, the cumulative number of registered accounts on PlayStation Network had exceeded 50 million worldwide.

North-Hearn should know about XBLA and PSN. Foundation 9 claims responsibility for nearly 15 per cent of the 300 or so games on Xbox Live Arcade. Its top five XBLA games by revenue have generated more than $22 million.

Foundation 9 owns six studios: Backbone Entertainment, Double Helix, Griptonite, ImaginEngine, Pipeworks and Sumo Digital. It reckons it's the world's "largest independent game developer".

Looking to the future, North-Hearn predicted big things for digital downloads, and Microsoft and Sony's platforms.

"We're strong believers that the market will move to both online and to digital distribution at some point, almost exclusively. The unknown is just what the timing of that is.

"PSN and XBLA are both great platforms for that to build upon.

"Connectivity and digital distribution, and dare I say cloud solutions are all where the market's going to go. XBLA and PSN are in a great position."

Picture of Wesley.

About Wesley Yin-Poole

Wesley is Eurogamer's news editor. He likes news, interviews, and more news. He also likes Street Fighter more than anyone can get him to shut up about it.

Read more articles from Wesley by visiting the Wesley Yin-Poole archive page.

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Comments (36) Latest comment 2 years ago

Comments for this article are now closed, but please feel free to continue chatting on the forum!

  • spazmo #1 2 years ago

    Here's todays '360 vs PS3' argument. BEGIN!

  • Deckard1 #2 2 years ago

    Only 30%? Thought it would be higher than that to be honest.

  • sfp_noodle #3 2 years ago

    I've only paid for Gears of War and Left 4 Dead dlc with the occasional arcade game that's been reduced but I have to say, if I was richer I'd buy a lot more content. There's shit loads on there to cater to everyone's taste. I just wish I had more money and more time to invest in more of those games.

  • GamesConnoisseur #4 2 years ago

    Whilst we know that the overall quality difference between XBLA and PSN are closing all the time, and some may argues that aside from cross chats, PSN would be better.

    Still even with the vaunted advantage that comes from FREE non subs option of PSN to play MP etc, we should see market force at work which would result a faster closing of gap and eventual win by PSN?

    I do appreicate XBLA but come on MS cant keep it up with the silver/gold whereas PSN got sub and standard which in comparasion are better on PSN?

    I would hope that MS get the message that there are a damn lots of X360 owners who are taking stance of not renewing gold subs but for me its still worth its weight in gold with my online gaming.

  • TelexStar #5 2 years ago

    "It's pretty healthy. 30 per cent of the hardware base is not only online and using Xbox Live, but it's all those and buying games. It's got to be encouraging for that type of distribution going forward."

    I'm not sure drawing a conclusion from XBLA arcade sales necessarily backs up the argument of "digital downloads as an exclusive delivery method for games".

    Surely, it makes sense to look at the % of people who've bought into the whole "Games on Demand" service, rather than XBLA titles? At 20 quid a pop, I'd wager the figure is far lower.

  • muscleblade #6 2 years ago

    "30 per cent of the hardware base is not only online and using Xbox Live, but it's all those and buying games"

    What the hell does the remaining 70% do. Many of the best games this gen is on xbla!!!!

  • rossmof #7 2 years ago

    My biggest gripe with PSN is that very few of the downloadable games have a demo, while all XBLA games do. I do like the fact that PSN is in pounds rather than points though.

  • SlackMaster #8 2 years ago

    I used to buy games on XBLA and PSN, impulse buys and the like, but then realised that I was wasting my money as I just didn't play them. I got Shank a little while back, played it for 15 minutes and then not played it since. It's not good to do this with physical game discs let alone digital downloads as there is no re-sale value in DLC etc.

    Dunno, just don't think it's worth the money and have really been cutting back on XBLA and PSN games and content. Really not sure how all the content I've brought in the past will transfer over to next gen consoles either and I must have over 50 downloaded games.
    Edited by SlackMaster at 18/10/10 @ 13:59

  • Monkey_Puncher #9 2 years ago

    I actually tend to buy more XBLA games these days than I do full price releases. I just find them to be much more fun and creative than the majority of the dirge that counts for a big budget title.

  • mkreku #10 2 years ago

    I've never bought an XBLA game and I've never bought a Gold account. The MS points system is too abstract and I'm not interested in paying a subscription to MS to play online.

    Say what you want about XBL and PSN, but to me it says a lot that I've played (by default) more games online on my cousins PS3 than my own Xbox 360. And the prices on the PS Store are in real money too.

  • mooseti #11 2 years ago

    I own a few xbla titles but the majority of 360 games I own are disc. I love the thrill of buying a new game, taking off the packaging and putting the disc in.

    There are many others like me and I don't think packaged media will be dead for a long, long time yet.

  • Vyggo #12 2 years ago

    I do have respect for your determination in resisting a point system like microsoft has. But man, you are missing out on some awesome games.

  • Badassbab #13 2 years ago

    I definately prefer XBLA to PSN. PSN can get better by doing the following-

    Being able to play demos of all the games like XBLA.
    Being able to view the list of games on offer in release date format rather than just sub genre.
    Having more games available and Sony Europe releasing more PSOne classics. I'd like to download the old PSOne Resi games that Sony US have released.
    Cross game chat.
    Edited by Badassbab at 18/10/10 @ 14:26

  • TheLittlestHobo #14 2 years ago

    I like having prices in points instead of cash, as you can shop around and find some good deals on point cards.

  • Stegofreak #15 2 years ago

    @Badassbab - the PlayStation Store does have a section where the latest games etc. are displayed in order of release and depending on quantity there can be 2-3 weeks of releases there. That any you can always use the PS3's internet browser to bring up the PlayStation Blog which always announces the week's releases.

  • layleeloo #16 2 years ago

    Being non biased being that I buy Store games for both PS3 and 360, it does still infuriate me that Sony dont provide demos of everythign on Launch. I mean flower - took a year to release a demo! It has got better recently thankfully but still not good enough. I would love to know however, what percentage of Live users actually buy Games On Demand at that ludicrous pricing! I mean, I have picked up retail versions of games added to that recently for less than a fiver - and they are charging £20 for them, for no physical product. Its hillarious. However, I do buy a lot of Live games, most recently Comic Jumper and Sonic4 on the 360 and joe Danger on the PS3. I probably play more of thes games than full retail releases. Something more retro and fun orientated about them which I like.

    I do also thing the PSN store is free debate is irrelevant now. It has been proven over time that a sub standard free product is not "as good" as a great one you pay for. I would be happy to pay for PSN if it made it better. PSN+ isnt that option yet either as its not an improvent on the overall service - just gives you a few nice perks.

    I also do not understand why the UK PSN store is so different to the superior US and Japanese stores of which I use. They are easier to navigate (even in blooming mandarin so that should teach sony something) and the categories are much better than the UK store. I dont see why they have three layous for the three regions - perhaps if they pulled together to make on uniform PSN layout for all regions it would be an improvement to the service for everyone - and then perhaps more people will use it, in turn more people buy games from it, in turn more GREAT games like Joe Danger, Crash Commando and the like will me made.
    Edited by layleeloo at 18/10/10 @ 14:57

  • Feanor #17 2 years ago

    "What the hell does the remaining 70% do. Many of the best games this gen is on xbla!!!!"

    About half of the 360s out there aren't even online.

  • Dead_Man_Typing #18 2 years ago

    Foundation 9 owns Sumo Digital? I did not know that.

  • Xardan #19 2 years ago

    I for one do not welcome our digital distribution overlords.

  • Doctor_What #20 2 years ago

    @Biker_Bob: I'm on PSN a lot lately and have had no problems at all. I used to get drop outs fairly often - I think it was my router playing silly buggers. I'm not sure that the PS3 handles b/g/n signal routers very well yet. Have a go at switching your router to just a b/g signal. That improved it a lot for me.

    @ TSB: Tosh. There are lots of great titles on PSN too, you just might have different tastes - just because they don't appeal to you it doesn't mean that they are bad. There's only one exclusive for XBL that I fancy (Limbo) and everything else doesn't interest me much. That would have been my first ever XBL purchase if my 360 hadn't died, whereas I've got lots of PSN titles. It's really down to what appeals to you, and PSN fits my tastes more. Neither is better or worse empirically, only subjectively.

  • M_of_the_sys #21 2 years ago

    "I'm on a T1 line (300Mb/s) and it took 4 hours(!) to download the Castlevania demo (1.5Gb)."

    I'm on a 50Mb line and it took me less than 30 minutes to download that demo and I also do not have Plus.

  • randompanda #22 2 years ago

    I find almost all my problems with the PSN regarding speeds and connections went away when I hardwired it, I realise that's not an option for some - but i'm not sure where these slow download speeds people are talking about are coming from - i'm on Virgin Media's 20 meg offering.

    There's potentially some speed improvements to be made if you switch to static IP addresses and put the PS3 in the DMZ, something about closed ports or whatnot, but static IP addresses have their own issues too...

  • Mkwone #23 2 years ago

    Personally i'm put off XBLA by the fact it uses points. I'd be much happier purchasing if i knew the actual price instead of some mock currency. But then again i don't buy many PSN/XBLA titles because i don't seem to play them that much. With the exception of Gran Turismo (the first free one at launch) and warhawk for the PS3 and Battlefield 1943 and Trials HD on XBLA few titles will have had more than half hour playtime. Without the pyshical case staring me in the face i forget what i have.

  • sneetch #24 2 years ago

    @Biker_Bob

    A T1 line is 1.544 Mbit/s not 300 MBit/s. It's approx 0.193 MByte/s, you sure it's a T1?

    Or has your ISP just christened it a T1 to confuse me? ;)
    Edited by sneetch at 18/10/10 @ 16:33

  • MDL199 #25 2 years ago

    TheLittlestHobo said "I like having prices in points instead of cash, as you can shop around and find some good deals on point cards".

    You can get cheap deals on PSN cards too! Microsoft points are a deliberate con to confuse people absolutely no question. You ask the average Xbox user how much they paid for the latest map pack and they really won't be sure.

    @Biker_Bob - You've obviously got a problem with your router or internet connection as there is no problem with PSN itself.

  • onyxbox #26 2 years ago

    In my experience XBL is good for getting a game going with it's party system 'n all that but actual online play they're pretty much the same.

    If anything; the Server based model that Sony 1st party games use can in some cases put PSN ahead. It annoys the hell out of me getting a 'Finding new host' message in Halo Reach especially when I'm paying for the service.

    I use both XBL and PSN and I'm still amazed at how many people truly believe that XBL is 'superior' for online play. The truth depends on what you value the most: server based online play, cross game party system, price, where your friends are etc.

    If PSN ever do provide the cross game voice chat rooms where you can take the whole room from game to game etc. then I would put PSN ahead and very reluctantly renew my XBL sub. If MS use servers for 1st party online gaming then XBL may nudge ahead and I'll happily forward on my £40 sub.

    Until then, they're as good/bad as each other.

    As for software, well I've personally spent more money on PSN simply because I've found more interesting titles on there such as Flower and the Pixel Junk games. Not only that but the store on XBL is a bit of a mess compared to the PSN store. The PSN store is easy to navigate, has a search feature and suggests other related titles (a bit like how iTunes does).

    To counter that: XBL has demo's versions of every XBLA game on the store. This was a smart move by MS and one I hope PSN adopt too (Sony, showing a preview video just isn't enough).

    So there's my two pence worth on this... they're about the same... just in different ways :)

  • Badassbab #27 2 years ago

    Stegofreak-

    It's very limited. On XBLA I can view in the following order-

    Alphabetically,
    Based on release date,
    Top downloads,
    Highest rated
    Genre

    ...and in the following catergories seperately-
    Arcade,
    Games on Demand
    Indie Games
    Demos
    Game Video's
    Themes
    Gamer pictures

  • onyxbox #28 2 years ago

    I think the points system isn't helping MS. I quite often don't bother buying stuff because I don't know what the hell 800 points equates to and I usually can't be arsed finding out there and then.

    I think they'd sell more on the XBL Marketplace if they ditched the points system.

  • mooseman721 #29 2 years ago

    I like using live and I do buy full games from it. What I don't like is that games cost 800 points for the US and the same points cost to me. It costs me £10 and them $10. Ummmmm.....exchange rate?

  • sfp_noodle #30 2 years ago

    @Biker_Bob

    "Firmware 3.50 or PSN Plus (or my 6th faulty PS3...)"

    If you had replaced the words PS3 with 360, I would still not believe that 6 different consoles died on you. If it really is true, and I seriously doubt anyone will believe it is, then you must have your PS3 stored in a microwave with it constantly running on full heat. There is no other explanation.

  • OwningXylophone #31 2 years ago

    @Onyxbox...

    Roughly speaking they break down like this:-

    160msp = £1.25
    800msp = £7
    1200msp = £10

    Beginning to get used to it all after 5 years using their silly points system

    @ Mooseman

    Except that most US prices don't include the sales taxes that vary from state to state, so exchange rate alone does not work as a comparison.
    Edited by OwningXylophone at 18/10/10 @ 17:46

  • celery7 #32 2 years ago

    I find it annoying that you can't just buy the correct number of points for the item you want. You'll always have a couple of hundred points left, but not enough to buy anything worthwhile, So you get more points to buy a game but you still end up with a random points value remaining...so you get more points...buy game but you're left with 310 points...PAH

    Of course thats what MS want you to do. Wasn't there a story some time ago where their pricing (or the lack of) was under scrutiny?

  • hahayou #33 2 years ago

    "Really not sure how all the content I've brought in the past will transfer over to next gen consoles either"

    So much this. And you have to wonder if a reason behind the points system is so MS can claim that these games have no monetary value if they discontinue the service. I don't imagine this would happen for a long time, but I also didn't think they would have already turned off the Xbox 1 servers...

  • celery7 #34 2 years ago

    @TSB

    I wouldn't say Xbox content is almost always cheaper than the same stuff off PSN, there are plenty of occasions where it works the other way. This just highlights that the pricing for both is all over the place, while PSN does seem to favour a 7.99 price point they'll happily throw in the od 9.99 or 11.99 in the name of variety (confusion?). You compare the PSN 7.99 with an XBLA game @ 800 points to suggest MS stuff is cheaper but in reality that's not their standard pricing these days is it? Seem to recall it changing around the time of the first summer of arcade to mostly 1200.

    So yeah, some stuff is cheaper on each service. I bet with their crazy pricing there is nothing coming in at the same price on each.

  • BlinkeredAxis #35 2 years ago

    TSB - It's a fanboy thing. There's no point trying to use 'sciency' things like the actual price of something - this reasoning cannot break the emotional bond that some people feel for their favourite console manufacturer.

  • celery7 #36 2 years ago

    I wasn't suggesting that your posts were opinion rather than fact, I was just saying that there are variations in pricing working in favour of both systems. Nor was I taking issue with you, your post said generally X is the case and I added sometimes it's Y. Which is true.

    Edit: Oh and then BlinkeredAxis said something pointless and highly predictable.
    Edited by celery7 at 18/10/10 @ 23:34