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Retail

Xbox 360 poised to break 25 million barrier

Fri 14 Nov 2008 9:38am GMT / 4:38am EST / 1:38am PST
Retail

Original Xbox tally expected to be passed by the end of November

Microsoft has announced that it expects sales of the Xbox 360 worldwide to pass that of the original Xbox - around 25 million units - by the end of November.

However, according to Mindy Mount, corporate VP and CFO of the company's Entertainment and Devices division, this is "still only a start," with the Xbox 360 a "big driver" of growth in the interactive entertainment business.

"So far we've done a great job appealing to the core gamers," she said at the BMO Market Capitals conference in New York, "And by the end of this month we expect our global installed base to reach 25 million units, surpassing that of the first Xbox.

"It's a great milestone for us, but still only a start when you consider that history shows three-quarters of a console's sales come at a price of USD 199 or lower. We hit that sweet spot in September, making our Arcade model USD 50 cheaper than the Wii and half the price of a PlayStation 3.

She also revealed that the console's price cut had resulted in a huge impact on sales worldwide: "In the US in September our console sales rose 42 per cent month over month, and in Europe they rose 62 per cent," she said. "In Japan we've had over a 500 per cent increase in sales."

Mount also discussed the economic situation, and echoed many others in her belief that while the videogames industry wasn't "recession-proof" it would hold up well.

"Certainly consumers are pulling in their purse strings a little bit, and you can't help when you read the newspapers or listen to the news but hear about companies taking down their forecasts and reducing their headcount," she said. "But we think that the whole entertainment industry, the interactive entertainment business, is poised to weather the storm a lot better than other businesses.

"If you take a look at history and the last recession we had in the US in 2001, the interactive business grew about 43 per cent that year. It's not to suggest that videogames are recession-proof, but what I think we are saying is a couple of things.

"One of them is that even in hard times people want entertainment more than ever before, and videogames offer great value for the money. But also a lot of what the interactive entertainment business is driven by is the cycle of platforms, where you are with the platform, where you are with price points and the titles that are out in the market today.

"Just a month ago NPD said it expects the sales of videogames hardware, software and accessories to rise 23 per cent in 2008 to USD 22 billion, and certainly Xbox is a big driver of that growth thanks to a combination of our new, lower price points, our blockbuster Holiday line-up and industry-leading online service Xbox Live."

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