Microsoft: "This year is going to be our biggest year ever"

Microsoft Interactive Entertainment Division CEO Dennis Durkin believes that 2010 has been a milestone year for the Xbox business.

"It's been a good three years for us," he told listeners at the Credit Suisse Group Technology Conference yesterday. "We've had nice stair steps in terms of growth every year sequentially getting bigger than the previous year, and this year is going to be our biggest year ever."

He also revealed that last week had seen "our biggest Black Friday in history, in our Xbox history."

Live and Kinect appeared to the focal points of growth, with Durkin revealing high take-ups for paid Live subscriptions. "Of our 25 million members, about half of them are subscribers for the business and pay us about $60 a year for that. So, it's a very, very large business for us and for our partners." The average subscriber was on the service for three hours a day, he claimed.

Kinect had been a success, he felt: "It was an amazing launch, amazing momentum, and it's something we're very, very excited about, still very committed to our 5 million number for the holiday, well on path for that."

Although not acknowledging the mixed critical response to Kinect's launch titles, he claimed consumers were pleased. "There's more than 300 reviews within the Amazon ecosystem. I've read all of them the best part about it is that almost 90 percent of them are four or five-star rated. And when you go through those, you realize that we are touching a bunch of new audiences."

While he declined to reveal Microsoft's specific intentions for Kinect's future, he hinted that it had potential for "healthcare, entertainment, other verticals, and you can really see some of the applications that are coming to life.

"There's a lot of experimentation going on right now in the developer community, which our CEO has famously avowed his support for developers over time."

Microsoft was no longer in the game of hardware experimentation for experimentation's sake, he claimed: "I want to make money on things that we sell. I think the business of subsidizing things is a historical artifact. And so, for us, it's about making money and extracting value for the things that we're building.

"I think with the pieces that we have today now in our hardware platform, in our Live ecosystem, and now with Kinect, and the new input paradigm that you have with Kinect, we think we have a real opportunity to have a five to ten-year major growth spurt within our business and space."