Xbox Live: How an Old Tech Company Built a Social Media Juggernaut

Xbox Live: How an Old Tech Company Built a Social Media Juggernaut

Harvard Business Review analysis, no less:

Amid the flood of social media IPOs during the last 12 months, another “old guard” tech company has quietly built one of the most dominant, fiercely loyal and profitable social media businesses to date. You might have heard of it: The company is called Microsoft, and the social media business is called Xbox Live.

Xbox Live is easy to miss. It’s a $2 billion revenue business embedded within the $9 billion revenue entertainment/devices business of the $73 billion revenue of Microsoft overall. If Xbox Live was a standalone business, its 40 million members would be dwarfed by user base of Linkedin, Twitter, Zynga and Facebook. But while Xbox Live’s membership is less than 20% of the size of Zynga (a comparable gaming company), it likely has nearly double the gross profit that Zynga generates. Not bad for the old guy.

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