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Xbox Live Arcade "past tipping point"

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."