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Gamertags can be changed using an Xbox One or Xbox 360 console (first time is free, then for a price of £8 / $10), the Xbox 360 supports eight Xbox Live-enabled profiles per memory unit and thirty-two profiles on the hard drive.

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It was first made available to the Xbox system in November 2002.When the service debuted, it lacked much of the functionality that later titles included, but Xbox Live grew and evolved on the Xbox and many aspects of the service were included with the Xbox 360 console out of the box, rather than through a later update.Microsoft's 5000th patent was Live-related and gave Xbox 360 users access to watch other gamers compete against each other over Xbox Live.An updated version of the service became available for the Xbox 360 console at the system's launch in November 2005, and a further enhanced version was released in 2013 with the Xbox One.The service was extended in 2007 on the Windows platform, named Games for Windows – Live, which makes most aspects of the system available on Windows computers.Leading up to the launch, Microsoft enlisted several waves of beta testers to improve the service and receive feature feedback. (which never was released officially) and NFL Fever to beta test.

Once beta testing concluded, Microsoft sent these beta testers a translucent orange memory card, a headset carrying case, and a beta tester tshirt with the slogan "I have great hands".

On November 15, 2007, Microsoft celebrated Xbox Live's 5th anniversary by offering its then over 8 million subscribers the title Carcassonne free of charge and awarding gamers who had subscribed to Live since its inception 500 free Microsoft Points.

Due to intermittent service interruptions during late December 2007 and early January 2008, Microsoft promised to offer a free Xbox Live Arcade game to all Xbox Live users as compensation, in an open letter to all Xbox Live members from Mark Whitten, Xbox LIVE General Manager.

Sound-dampened booths and broadband-connected Xbox consoles—featuring an early version of Unreal Championship—demonstrated the service on the show floor.

The Epic title was one of the flagship titles for the service, which was slated for a debut on November 15, 2002, marking the anniversary of the Xbox launch.

The company determined that intense online gaming required the throughput of a broadband connection and the storage space of a hard disk drive, and thus these features would be vital to the new platform.