Microsoft explains Xbox Live price hike

In late August Microsoft announced that it would up the annual Xbox Live Gold membership fee from $50 to $60. The change went into effect yesterday alongside the arrival of the fall dashboard update. At the time, Microsoft offered no rationale behind the price hike, but now a company spokesperson has details to share.

"In 2002 it was strictly multiplayer gaming," Xbox Live's Craig Davison told Gamasutra in a recent interview. "Now we get those Call of Duty map packs before anybody else does. We've got Gears and Halo, of course, as exclusives. We continue to get exclusives on the service as well. And we've gone from 400,000 members in our first year to 25 million."

Davison also told the industry site that the subscription price rate climbed due to the fact that Microsoft is always looking for more and more services and features for Xbox Live, and that costs money.

"So during that time, we've definitely got to fund it, and we want to add more and more and more,” Davison continued. "ESPN is a great example. No extra charge for Xbox Live Gold members. But we want to continue to bring that content in. We also want to continue to innovate on all dimensions, whether it's social, entertainment, or gaming. So there you go."

Last week Microsoft announced that its Xbox Live subscribers--who extend 25 million deep--spend a total of 1 billion hours on the service each month. The company also announced that it has sold more than 45 million Xbox 360s in 35 countries since it debuted in 2005.