Microsoft continues to push the social networking and entertainment capabilities of the Xbox 360–games on demand and group movie viewing are two such features due in the next system update (due in August). We asked Shane Kim, Microsoft’s VP of Strategy and Business Development for Interactive Entertainment, about the evolution of Xbox Live and what the launch of Project Natal means for the business.

Kevin Ohannessian: In the June NPD numbers, the industry showed a significant drop year-to-year. Yet, Xbox 360 is the only console with sales up this year. What do you contribute that resiliency to?

Shane Kim: It certainly helps to have the most affordable console on the market today, with the Xbox 360 Arcade version at $199. But it’s not just price alone, but in the totality of the experiences that we are delivering. Since we launched the New Xbox Experience and Netflix functionality last year, we continue to add more than 500,000 new members to the Xbox Live service every month. We are up to over 20 million members on Xbox Live worldwide. These are people who have logged on to the service in the last six months, not just anybody that’s ever signed up. And we just got more in store, in terms of continuing to drive growth. We are the only console that’s up for 2009 over 2008, for the first six months of the calendar year. Which I think is pretty impressive given the environment and is a testimony to the value and the pricing we are delivering to customers.

Read the full article at Fast Company.