Is there any evidence that this is a direct result of MW2? The widespread console ban also happened during the same week in question.

Jonathon, this is a fine point, and we've added it to the story. However, it seems like quite a small percentage of Xbox Live users were banned, so our opinion, at least, is that it's a minor contributor.

In what world is losing a 20th of your user base a small percentage. Not to mention that its a console ban so families with multiple accounts could bring that number even higher. MS cut off there nose to spite there face. They were upset with pirating so they cut off the only avenue that these people would use to legitimately pay for content. Not to mention all the revenue lost from people not renewing there $60 dollar a year membership. At the same time they can continue to play pirated games. The smart move would be to ban online playing but still allow users to purchase content and use netflix. This way they could still make money off people who are playing pirated games and they might by a legal version for online play.

Interesting

It wouldn't be such a a big deal with the banning if the people didn't have to pay for online on X360.

"In what world is losing a 20th of your user base a small percentage."

I suppose if sales went down 5% (ie. the same proportion that was banned), your point would would be stronger. They went down drastically demonstrating that it has something to do with the overall userbase. It's unknown whether or not that pirating 5% were active XBLA purchasers to begin with.

I think Langley is right. I've been completely engrossed in playing Forza 3 and now MW2, to the point where I haven't even checked out the latest XBLA releases. Everyone on my friends list is on and playing something, whether it's Borderlands, MW2, NBA 2K10, or Forza. Moreso than at any time during this year people are playing big name retail releases and perhaps have little time for anything else.

Epic fail whale. It gets worth with each week. Abandon ship!

Would the console ban really have had any effect at all? I'm confused as to why people with modded consoles who pirate traditional games on disc would be purchasing XBLA games instead of stealing those too. Or am I missing something?

@Joe,

I hate to play the devil's advocate here, but there is no reason to make broad based assumptions that pirates steal every piece of software in their collection. I also imagine since XBLA games don't come on traditional discs, they are a bit trickier to steal unless there is another scene of piraters that buy these games, rip them from their Xbox hard drives, then turn around and distribute them freely.

Piracy may be aberrational as well as those that commit these acts of copy-right infringement, but these are still largely normal people.

Can we see a comparison to XBLA sales numbers from last year over the same period? Because it seems like it should be par for the course for XBLA sales to take a hit during blockbuster season.

@Jonathan: I did a quick search of the interwebs a while ago, when trying to compare App Store and XBLA/XBIG game sales. As far as I could tell, there isn't currently any mechanism for pirating XBLA/XBIG games - the hacks to the Xbox 360 seem to involve modifying the DVD-ROM drive to spoof disk authentication: the DRM on DLC appears to be undefeated.

The fact that XBLA sales has dropped may well be just down to the fact that it's blockbuster season, but the fact remains that Microsoft has just killed off a minimum of 5% of their active userbase.

(Actually, it'd be interesting to know what criteria Microsoft used to get the "20 million" number. Given that it's generally used as a marketing bulletpoint in the war against Sony/Nintendo, I'd expect it to include every Xbox which has accessed XBL at least once as well as double-dipping from RROD returns and hardware failure replacements. Not to mention the Gold/Silver split. Overall, I'd expect the actual active userbase to be around to 10 million. Admittedly, the question is then whether Microsoft overstated or understated the piracy figures - they may have understated the numbers to avoid embarrassment/perception of an insecure platform or overstated them to sow some FUD among pirates.

I can't decide which is more likely, but assuming a +/- range of 25% and sticking with an active userbase of 10 million, the impact to the XBL userbase could range up to 12.5%. Which is a significant chunk!)

However, the fact is that Microsoft *knows* who the pirates are and also has a copy of their purchasing/gameplay patterns: if said data could be anonymised in some form and released for analysis, it would be a treasure trove of information and go some way towards establishing the true impact of piracy...

For instance: how many disk-based games do pirates have achievements for? How much XBLA/XBIG/movie/DLC did the average pirate purchase? How many subscribed to Gold memberships? What's the total online spend of the average pirate and how does it compare to the non-pirates?

An even more interesting question, assuming there's a way to differentiate between pirated/non-pirated games: how many original disk-based titles did the average pirate purchase and how does this compare to the attach rate for non-pirates?

Ripping XBLA games would not help. As far as I know, both the demo and the full versions are the same on disc, however you also have a license key with the full one.

(I know since my console was replaced under warranty service, and the new one used to show my games as "demo" when I was offline. I had redownload them all to fix it).