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Downloadable content was available, though limited in size due to the narrowband connection and the size limitations of a memory card.

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.

On the same day, Larry Hyrb, Xbox Live's Major Nelson, announced on his blog that Xbox Live support for the original Xbox would be discontinued on April 15, 2010, including online play through backwards compatibility on the Xbox 360 and all downloadable content for original Xbox games.

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.

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.

Microsoft has announced plans to extend Live to other platforms such as handhelds and mobile phones as part of the Live Anywhere initiative.

Utilizing the required broadband bandwidth, Xbox Live featured a unified gaming "Friends List", as well as a single identity across all titles (regardless of the publisher), and standardized voice chat with a headset and communication, a feature that was still in its infancy.

Leading up to the launch, Microsoft enlisted several waves of beta testers to improve the service and receive feature feedback. (which never was released officially) and NFL Fever to beta test.

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.