Speaking at the Consumer Electronics Show, Bach stated that Xbox Live is the "largest paid content service in the world", and outlined the company's target of growing from 500,000 subscriptions last June to one million subscriptions this June.

"The essence of what's happening here is that we are finding a new way for people to have social experiences," he told the audience in Las Vegas. "We're blazing new trails. The business model is new. The concept model is new. The genres of content are new. This is all green field."

However, despite the success of Xbox Live, it continues to be outstripped by the uptake of Sony's online offering, with PS2 network adapter sales continuing to grow in all major territories despite what many critics label as a disappointing line up of software so far.

Sony may also be about to steal a technological march on Microsoft's offering - with the platform holder keen to see developers using the Eye Toy webcam peripheral for online video communications.