People like Xbox Live, but not enough to offer up their credit card information to renew a subscription apparently. Xbox Live marketing manager Robin Burrows, speaking with MVC, stated the stat is helping Microsoft strengthen the retail side of digital. For instance, there are no plans to offer a game digitally the same day as it is released via retail. Microsoft, unlike Sony with their upcoming Vita handheld, still sees the viability of the retail model.
What they will continue to do is bundle a Live Arcade game with a boxed retail title as a bonus, i.e., Gunstringer shipping with a code for Fruit Ninja.
That’s not addressing the core problem though, which is most people like to pay LESS for their Live subscription, retailers offering sometimes grand discounts on the fees, whereas promos through Microsoft require cancellation. If you forget, you’re dinged for the full price next cycle.