Microsoft has always talked up the fact that it has the best online experience with Xbox Live, but of course to enjoy it to its fullest extent you have to be a paying Gold level subscriber. Imagine our surprise when Microsoft let it be known that only half of its installed user base is actually paying $60 per year to be an Xbox Live Gold subscriber.

While Microsoft says that they have over 25 million Xbox Live members, only half of them are Gold subscribers. While it is a significant revenue stream for the company it could appear that they have a lot of room for growth in getting users to go Gold.

Despite the fact that half of the users are not Gold subscribers, it is surprising to learn that digital downloadable content and not subscription fees are the biggest revenue stream for Xbox Live. It does appear that even if users are not paying to subscribe to the service they are still buying lots of content which, of course, is good news for Microsoft.

Sources tell us that Microsoft’s recent launch of its Xbox Live Rewards program (which provides rewards in the form of Microsoft Points) to those who register for the program offers large Microsoft Points rewards for subscribing or re-subscribing to the service. The company is planning to launch additional initiatives to retain subscribers and increase content spending on the service in the upcoming months ahead.