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The company determined that intense online gaming required the throughput of a broadband connection and the storage space of a hard disk drive, and thus these features would be vital to the new platform.

In February 2013, Yusuf Mehdi, corporate vice president of Microsoft's Interactive Entertainment Business, shared that Xbox Live members now number 46 million, up 15 percent from a year ago, during the Dive into Media conference in Southern California.

In June 2014, Microsoft retracted the Xbox Live Gold requirements to download streaming media apps (including Netflix, Hulu, You Tube, Internet Explorer, Skype, and others), though various rental or subscription fees may still apply.

Gamertags can be changed using an Xbox One or Xbox 360 console (first time is free, then for a price of £8 / $10), the Xbox 360 supports eight Xbox Live-enabled profiles per memory unit and thirty-two profiles on the hard drive.

A player's Gamertag account status can be checked using a variety of online tools, which is useful especially when looking for a new Gamertag, or confirming that a Gamertag exists.

An updated version of the service became available for the Xbox 360 console at the system's launch in November 2005, and a further enhanced version was released in 2013 with the Xbox One.

The service was extended in 2007 on the Windows platform, named Games for Windows – Live, which makes most aspects of the system available on Windows computers.

On November 15, 2007, Microsoft celebrated Xbox Live's 5th anniversary by offering its then over 8 million subscribers the title Carcassonne free of charge and awarding gamers who had subscribed to Live since its inception 500 free Microsoft Points.

Due to intermittent service interruptions during late December 2007 and early January 2008, Microsoft promised to offer a free Xbox Live Arcade game to all Xbox Live users as compensation, in an open letter to all Xbox Live members from Mark Whitten, Xbox LIVE General Manager.

On November 12, 2009, Dennis Durkin, COO of Microsoft's interactive entertainment business, announced that November 10, 2009, the release of Call of Duty: Modern Warfare 2 marked the busiest day ever on Xbox Live, with over two million active users simultaneously.

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