How Xbox Live Works

Xbox Live launched in 2002 and continues to expand its entertainment offerings. See more video game system pictures.
Screenshot by HowStuffWorks staff

Microsoft launched Xbox Live to much fanfare in 2002, and the hype seems justified. By 2010, the number of users exceeded 23 million [source: Shaw]. Thanks to the success of newer Xbox 360 consoles plus streaming video services like Netflix and innovative enhancements like Kinect, that number grew to 30 million just one year later [source: Microsoft].

Gaming industry experts agree that Xbox Live was a key factor in the success of online gaming in the 2000s. Besides boosting the number of online gamers worldwide, Xbox Live includes social networking and streaming audio and video. From its earliest days, Xbox Live let you read e-mail, watch movies, listen to music and share photos from your Xbox console. By 2011, Xbox Live boasted the following features and services:

  • Streaming movies and television shows from Netflix and Hulu Plus
  • Sports broadcasts and highlights from ESPN
  • Streaming radio from
  • Streaming music library services from the Zune network
  • Social networking integration with Facebook and Twitter
  • Online payment integration with PayPal

What do users get out of the Xbox Live experience? How do you get started using Xbox Live? Let's first look at the basics of Xbox Live and how you can get in on the action with your Xbox 360.