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XBOX SALES SOAR IN EUROPE

London, 22 October 2004 - Xbox®, the future generation video game system from Microsoft, today announced red hot sales over the past few weeks. Xbox enjoyed 53% market share among consoles in the UK last week, up 49% from the previous week[1], whilst turning in strong performances across Europe too.

Xbox, which retails at an estimated street price of €149.99/£99.99, has seen a growth of sales in recent weeks helped by a wealth of great value bundles, an exciting Christmas games line up throughout Europe and excellent value for customers. It is also bolstered by its increasingly popular online gaming service, Xbox® LiveTM - which now has more than one million members world-wide.

"This is fantastic news for Xbox - demonstrating its ever-strengthening position in the video game console market," said Michel Cassius, senior director, Xbox Platform and Marketing. "We have some fantastic games on the way - the innovative Fable, the debut of Electronic Arts' games on Xbox Live such as EA SPORTSTM FIFA® Football 2005, Pro Evolution Soccer 4 - also on Xbox Live - and of course the hottest game this Christmas on any platform, Halo 2. Any gamer confused about which console to buy this Christmas should get to the stores quickly".

Xbox continues to go from strength to strength, with cumulative worldwide shipments of 15.5 million consoles since launch and a worldwide shipment goal of more than 20 million units by the end of June 2005. The groundbreaking Xbox Live service is expected to expand to an excess of 1.5 million members by the end of June 2005, representing 50%+ growth. Xbox Live is the evolving, dynamic gaming service that continues to bring people together to share experiences, from social game play to healthy competition. Players in 24 countries around the world have spent more than 160 million hours (or 20,000 years) playing Xbox Live on popular games like Project Gotham Racing® 2.

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About Xbox®

Xbox® (http://www.xbox.com/) is Microsoft's future-generation video game system that delivers never before seen gameplay experiences. With more than three times the graphics performance of other game consoles, top-quality DVD playback, Dolby 5.1 surround sound to make games and movies come alive, and a hard disc that opens up new kinds of gameplay, Xbox is the video game system that delivers more of what gamers want. Xbox is available Friday, 27th August in Europe for an estimated street price of €149.99/£99.99.

About Xbox Live

Xbox Live is the first comprehensive, online game service fully dedicated to fast‑action broadband gaming experiences. Xbox Live allows gamers to play multiplayer Xbox games with other gamers everywhere via a broadband Internet connection. With a built‑in hard drive and Ethernet port, the Xbox console was built from the ground up to be an online gaming system so there's no need to buy additional peripherals.

Xbox Live enables all gamers to find and play with their friends easily; talk to other players during game play through the Xbox Communicator headset; and download current statistics, new levels and characters to their Xbox hard drive; and play online.

About Microsoft

Founded in 1975, Microsoft (Nasdaq "MSFT") is the world-wide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software -

any time, any place and on any device.

This document is provided for informational purposes only, and Microsoft makes no warranties, express or implied, with respect to this document or the information contained in it.

Microsoft and Xbox are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

For more information, press only:

Marie-Claire Suter

UK PR Manager - Xbox & PC Games

Tel: +44 (0) 118 909 4599

Email: i-maries@microsoft.com

[1] Based on Chart-Track data from weeks 41 - 42, 2004

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