Xbox Live Arcade (XBLA) is a digital video game download service available through the Xbox Games Store, Microsoft's digital distribution network for the Xbox 360. It focuses on smaller downloadable games from both major publishers and independent game developers. Titles range from classic console and arcade video games, to new games designed from the ground up for the service. Games available through the XBLA service range from $5-20 in price, and as of October 2016, there have been 719 Xbox Live Arcade titles released for the Xbox 360. Prior to the Xbox 360, "Xbox Live Arcade" was the name for an online distribution network on the original Xbox, which was replaced by the Xbox Live Marketplace.
The Xbox Live Arcade service was officially announced on May 12, 2004, at Microsoft's E3 press conference by Bill Gates  and launched on November 6, 2004, for the original Xbox game console. The XBLA software was obtained by ordering it on Microsoft's website. It was sent by mail on a disc that also contained a free version of the Ms. Pac-Man video game. 
To generate greater publicity for the service, the disc was also distributed with special issues of the Official Xbox Magazine and as part of the Forza Motorsport Xbox console bundle The service launched with six titles and expanded its library to twelve titles by the end of the year. Once connected to Xbox Live, customers could purchase additional titles by using a credit card, or download a limited trial version of a game. Prices for the games range from $4.99 to $14.99.
|List of Xbox Live Arcade games released on the original Xbox since early 2011 (27 titles)|
On November 22, 2005, XBLA was relaunched on the Xbox 360. The service was integrated into the main Dashboard user interface, and the Xbox 360 hard drives were bundled with a free copy of Hexic HD. Every Arcade title on the Xbox 360 supports leaderboards, has 200 Achievement points, and high-definition 720p graphics. They also have a trial version available for free download. These demos are playable and most of them offer only a fraction of the levels, modes, and content of the full game. A full version of the game must be purchased to allow the user to upload scores to the leaderboards, unlock achievements, play online multiplayer (with a few exceptions), and download bonus content. Several new features and enhancements have been added through software updates including a friends leaderboard, additional sorting options, faster enumeration of games, an auto-download feature for newly released trial games, and "Tell a Friend" messages. The original size limit imposed by Microsoft for Xbox Live Arcade games was 50 MB, in order to ensure any downloaded game could fit on a 64 MB Xbox memory unit. The limit has since been changed to 150 MB, then 350 MB, and now 2 GB, the latter of which is a technical limitation of the system (rather than an arbitrary limit imposed by Microsoft). On September 12, 2012 the 2 GB limit was raised to an unknown number with two titles, Red Johnson's Chronicles and Double Dragon Neon weighing at 2.68 GB and 2.24 GB, respectively.
On July 12, 2006, Microsoft launched the "Xbox Live Arcade Wednesdays" program, which promised a new Arcade game to be launched every Wednesday for the rest of that Summer. When that summer ended, Microsoft announced that new titles for XBLA would also be released on Wednesdays. In order to promote the service in retail, Microsoft released Xbox Live Arcade Unplugged Volume 1 as a compilation disc of six games. On October 18, 2007, Microsoft announced the Xbox 360 Arcade console SKU which includes full versions of Boom Boom Rocket, Feeding Frenzy, Luxor 2, Pac-Man Championship Edition, and Uno. On May 22, 2008, Microsoft's general manager of Xbox Live, Marc Whitten, detailed changes for the service that included increasing the size limit of the games to 350MB and improving the way digital rights management is handled. Furthermore, Microsoft created an internal games studio to create "high quality digital content" for XBLA.
On July 30, 2008, Microsoft announced the XBLA Summer of Arcade. Anyone who downloaded one of the titles released over August, (Geometry Wars: Retro Evolved 2, Braid, Bionic Commando Rearmed, Galaga Legions and Castle Crashers) would be entered into a prize draw with a grand prize of 100,000 Microsoft Points, 12 Month Xbox Live Gold subscription, and an Xbox 360 Elite console. Another Summer of Arcade began the next year on July 22, 2009. Anyone who purchases all the titles released, ('Splosion Man, Marvel vs. Capcom 2, TMNT: Turtles in Time Re-Shelled, Trials HD and Shadow Complex,) will receive an 800-point reward. The next Summer of Arcade began on July 21, 2010, and features Limbo, Hydro Thunder Hurricane, Castlevania: Harmony of Despair, Monday Night Combat and Lara Croft and the Guardian of Light. A "Shopping Spree" promotion ended November 1, 2010, in which anyone who spent over 2400 points during October 2010 received an 800-point reward.
By March 10, 2006, three million downloads had been made on the service. By January 30, 2007, that number had grown to 20 million. The service reached 25 million downloads on March 6, 2007 with 45 million downloads projected by the end of 2007. On March 27, 2007, Microsoft declared Uno to be the first Xbox Live Arcade game to exceed one million downloads. Nearly 70 percent of Xbox 360 owners connected to Xbox Live have downloaded an Arcade title with the attach rate being 6-7 titles per user. Original games typically receive 350,000 downloads in the first month. Titles have an average 156% financial return over twelve months with the first two months of sales accounting for just 35% of total volume. Average conversion rate (from trial download to purchase) across all titles is 18% (a low of 4% and high of 51%). On September 19, 2007, Microsoft announced the top ten Arcade downloads worldwide as Aegis Wing, Uno, Texas Hold 'em, Geometry Wars: Retro Evolved, Bankshot Billiards 2, Street Fighter II: Hyper Fighting, Teenage Mutant Ninja Turtles 1989 Classic Arcade, Worms, Castlevania: Symphony of the Night, and Contra.
With Xbox One, Microsoft has decided to forgo placing different types of games in different channels. As such, Microsoft have discontinued use of the "Live Arcade" moniker, instead grouping all types of games (would-be Arcade titles, retail, and Indies) together.
Xbox Live Arcade titles range in price from $2.50 to $20 with the vast majority selling for $10 and under. The games are generally aimed towards more casual gamers, striving for "pick up and play" appeal. Several games were temporarily free, including Texas Hold 'em, Carcassonne, and Undertow. Others are permanently free including Aegis Wing, a game created by three Microsoft interns,TotemBall, a game that can only be played with the Xbox Live Vision camera,Yaris (a Toyota-backed advergame), and Dash of Destruction, which was released on December 17, 2008, as a Doritos advergame. On November 30, 2007, Microsoft introduced "Xbox Live Arcade Hits", where games are permanently reduced in price (a similar concept to their "Platinum Hits" for regular retail Xbox 360 games). As of July 22, 2008, current Arcade Hits include Lumines Live!, Assault Heroes, Zuma, Doom, Bankshot Billiards 2, Small Arms, Puzzle Quest: Challenge of the Warlords, and Marble Blast Ultra. On June 24, 2011 video game website 1UP.com reported that Microsoft was preparing to bring free-to-play games to Xbox Live and said games will include a microtransaction service. The first free-to-play game, Happy Wars, was released on October 12, 2012.
In May 2008, Microsoft announced that games older than six months would become eligible for delisting from the service if they had a Metacritic score below 65 and a conversion rate below 6%. The objective was to "focus the catalogue more on larger, more immersive games and make it much easier to find the games you are looking for." However, Microsoft has never removed a game using this method.
In February 2010, it was announced that nine games from Midway Games would no longer be available for purchase, "due to publisher evolving rights and permissions" (even though Sony's PlayStation Store never did as such with its own downloadable Midway games), referring to the purchase by Warner Bros. of some assets of Midway Games, including certain rights related to the nine games. Similar fates befell the XBLA version of Double Dragon when its publisher went under. Yaris was an advergame that was pulled from the system after a year due to avoid it becoming stale content. Id Software's Doom was pulled from the catalogue due to Id being purchased by publisher Zenimax Media, and as such the publishing rights were removed from then publisher Activision. From January 19, 2012, Doom was restored to Xbox Live Arcade under new publisher Bethesda. In 2011, Ubisoft announced that Teenage Mutant Ninja Turtles: Turtles in Time Re-Shelled was due to be removed from the Xbox Live service on June 30, 2011, due to an expired license.Chessmaster Live has also been removed.
On December 15, 2013, Capcom announced on their blog that Marvel vs. Capcom 2 and Ultimate Marvel vs. Capcom 3 would be removed from the XBLA store. Although no specific date was listed, the last date for DLC for these titles was listed as December 26, 2013.