But the runaway success of Nintendo's new Wii, a game console that openly caters to the mass market, has underlined the importance of more casual gamers to the industry. The console debuted mid-November and is expected to sell 4 million consoles worldwide by the end of the year.
"Microsoft has gotten a solid base of hardcore gamers who are drawn to its first person shooters," said video game analyst David Cole, president of DFC Intelligence. "But that is one small segment of the game market."
Even games with heralded online features are often played alone.
Cole says that even though 6 million copies of the hit alien-killing game Halo 2 were sold, only 2 million of those users took the game online, despite online being heralded as its most important feature.
Xbox Live's subscribers are spread across 24 million original Xboxes as well as Xbox 360s, which Microsoft says should have 10 million units shipped by the end of December.
The most popular games on Live are usually shooters such as Halo 2, Gears of War, Call of Duty 2 & 3 and Rainbow Six Vegas, and so the online environment is often full of aggressive and sometime verbally abusive players, which can make even experienced gamers uncomfortable at times.
Microsoft hopes to counter any perception of Live as a service for the hardcore only. The company recently launched a video download service that allows users to download movies and television shows to their Xbox 360 consoles for a fee. Aaron Greenberg, the group product manager for Xbox Live said that only 10 percent of original Xboxes were connected to the Internet, while more than 50 percent of all Xbox 360s are taken online, proving that the Live community is becoming more inclusive.