In a Microsoft quarterly earnings report and conference call, it was announced that Xbox Live monthly active users have reached a new record 55 million. This is a significant boost compared to the same time last year.
Microsoft's overall gaming revenue was down 3% year-over-year from September to December (located in the same report), attributed to hardware.
People are playing and they're playing online! While single player experiences aren't going away anytime soon (though their death is often predicted by some capricious pundit every year like clockwork), online play is becoming more and more pervasive. Services like Xbox Live are an extension of that.