The Xbox LIVE Marketplace is a virtual market designed for the console that allows Xbox LIVE users to download purchased or promotional content. The service offers movie and game trailers, game demos, Xbox LIVE Arcade games, gamertag images and Xbox 360 Dashboard themes as well as add-on game content (items, costumes, levels etc). These features are available to both silver and gold members on Xbox Live. A hard drive or memory unit is required to store products purchased from Xbox LIVE Marketplace.[40] In order to download priced content, users are required to purchase Microsoft Points for use as scrip;[41] though some products (such as trailers) are free to download. Users are able to view items available to download on the service through a PC via the Xbox Live Pipeline website.[42] An estimated seventy percent of Xbox LIVE users have downloaded items from the Marketplace.[43]

On November 6, 2006, Microsoft announced the Xbox Video Marketplace, an exclusive video store accessible through the console. Launched in the United States on November 22, 2006, the first anniversary of the Xbox 360's launch, the service allows users in the United States to download high-definition and standard-definition television shows and movies onto an Xbox 360 console for viewing. At launch the service offered 800 hours of standard footage and 200 hours of high definition content.[citation needed] With the exception of short clips, content is not currently available for streaming, and must be downloaded. Microsoft has also announced that its Microsoft TV service will add IPTV functionality to the console, giving users the ability to stream 2 simultaneous HD and 2 simultaneous SD channels.[44] Movies are also available for rental. They expire in 14 days after download or at the end of the first 24 hours after the movie has begun playing, whichever comes first. Television episodes can be purchased to own, and are transferable to an unlimited number of consoles. Downloaded files use 5.1 surround audio and are encoded using VC-1 for video at 720p, with a bitrate of 6.8Mbit/s.[45] Television content is offered from MTV, VH1, Comedy Central, Turner Broadcasting, and CBS; and movie content is Warner Bros., Paramount, and Disney, along with other other publishers.[46]

After the Spring 2007 update, the following video codecs are supported:

• H.264 video support: Up to 15Mbit/s, Baseline, Main, and High (up to level 4.1) Profiles with 2 channel AAC LC and Main Profiles.
• MPEG-4 Part 2 video support: Up to 8Mbit/s, Simple Profile with 2 channel AAC LC and Main Profiles.

During Microsoft Press Conference at E3 2007 on July 10, 2007 it was announced that Xbox LIVE users in Europe and Canada would be able to use the exclusive video store that is curently available only in the United States by the end of 2007.[citation needed]

As a late addition to the Fall Xbox 360 update which was launched on the 4 December 2007 25 movies were added to the European Xbox 360 video market place on the 11 December 2007 and cost 250 Microsoft points for the SD version on the movie and 380 Microsoft points for the HD version of the movie.[47]Xbox LIVE members in Canada featured the ability to go on the Xbox LIVE Marketplace as of December 10, 2007 with around 30 movies to be downloaded for the same amount of Microsoft Points.

Xbox LIVE Arcade is an online service operated by Microsoft that is used to distribute downloadable video games to Xbox and Xbox 360 owners. In addition to ****c arcade games such as Ms. Pac-Man, the service offers some new original games like Assault Heroes. The Xbox LIVE Arcade also features games from other consoles, such as the PlayStation game Castlevania: Symphony of the Night and PC games such as Zuma. The service was first launched on November 3, 2004,[48], using a DVD to load, and offered games for about US$5 to $15. Items are purchased using Microsoft Points, a proprietary currency used to reduce credit card transaction charges. On November 22, 2005, Xbox LIVE Arcade was re-launched with the release of the Xbox 360, in which it was now integrated with the Xbox 360's dashboard. The games are generally aimed toward more casual gamers; examples of the more popular titles are Geometry Wars: Retro Evolved, Street Fighter II' Hyper Fighting, and UNO.[49]