At an event showcasing upcoming first-party releases, corporate VP of Microsoft Game Studios Shane Kim said that 2008 would be an even better year for the Xbox 360.
"What we're really trying to communicate is that this is going to be another landmark year for Xbox 360," Kim told GamesIndustry.biz and our sister site Eurogamer.net.
"Mainly because we are really focused on the strategy of tremendous exclusive content. Titles like Gears of War 2, Fable 2, Banjo, et cetera. as well as the continuing leadership we have in the online space with Xbox Live."
When asked to clarify whether the Xbox 360 or the PlayStation 3 was winning in Europe, Kim said that it was a "horse race no matter what."
"I understand that Sony has declared leadership already. We'll let the data speak for itself," he replied.
Noting that Europe has historically been a Sony stronghold, Kim said that any progress the company was making there is great progress. He pointed to the increase in console sales as a result of the recent price drop as well as data showing a larger amount of GTA IV sales for the Xbox 360 over the PS3.
As for the 360's showing in Japan, Kim was under no illusion that the race was close.
"Look, we've acknowledged for a long time that we probably wouldn't win in Japan and that it was going to continue to be a tough market for us.
"We took some different steps in this generation - our partnership with Sakaguchi-san produced two very well-received and critically reviewed titles in Blue Dragon and Lost Odyssey. Unfortunately, it remains a difficult market for us."
Even so, he thinks that in the long run the company will see more success in Japan.
"I'm not going to go out and say our hope is to win in Japan because that's not realistic. Do I think we have room for progress and improvement? I absolutely do.
"So, no, the battle is not over."
The complete interview with Microsoft Game Studio's Shane Kim will be available on Eurogamer.net and GamesIndustry.biz soon.