Microsoft told us at E3 that they were going to put a greater emphasis on the sales of Xbox Live Arcade content going forward and to that end they announced their “Summer of Arcade” promotion to highlight the release of a lot of high profile titles.

The strength of the titles and greater push has paid off for both Microsoft and developers with the sales of XBLA titles up almost 58 percent in unique members purchasing titles. This makes August the highest-grossing month for Xbox Live sales to date. This is a remarkable 67 percent increase over the previous record month, according to Microsoft.

The depth and quality of titles such as Geometry Wars: Retro Evolved 2, Braid, Galaga Legions, Bionic Commando Rearmed, as well as the very highly rated hit, Castle Crashers, has really helped to take sales on Xbox Live Arcade to the next level. But Microsoft isn't satisfied and have a slew of additional titles coming, including Portal: Still Alive, South Park, and R-Type Dimensions.

The focus on these lower-priced casual games has been surprising developers who have been suggesting that getting back to the gaming roots may be very profitable and some studios are moving development staff into pursuing the development of these types of titles. “Let’s face it, they cost less to develop and they are turning a profit and doing numbers that we did not think we possible”, we were told by one developer.

Microsoft says that they remain committed to the release of “A” list titles, but they believe that this niche casual gaming market that is being serviced by XBLA titles will remain an area that Microsoft will continue to focus on going forward. Microsoft continues to have a lead in this area over challengers Sony and Nintendo who continue to be behind Microsoft in the development and marketing of their online strategy as well as electronic software sales and delivery. Microsoft has done an excellent job of making Xbox Live superior to their competitors’ offerings.