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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.

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The Epic title was one of the flagship titles for the service, which was slated for a debut on November 15, 2002, marking the anniversary of the Xbox launch.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.This would allow not only for significant downloadable content, such as new levels, maps, weapons, challenges and characters, to be downloaded quickly and stored, but also would make it possible to standardize bandwidth intensive features such as voice communication.It was changed later, wherein all Xbox Live titles included the universal gold Live bar.By the time of the Xbox 360, all titles were required to provide at least a limited form of Xbox Live "awareness".Nevertheless, due to lack of widespread broadband adoption at the time, the Dreamcast shipped with only a dial-up modem while a later-released broadband adapter was neither widely supported nor widely available.

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

Steve Ballmer and Bill Gates both had a vision of making premium download content and add-ons that would attract many new customers.

Based on this reasoning, the console included a standard Ethernet port (10/100) in order to provide connectivity to common broadband networks, but did not include a modem or any dial-up support, and its online service was designed to support broadband users only.

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.

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