Next-Gen.biz Feature: Is Xbox 360 Past Its Peak?

March 2nd, 2008, 00:21 Posted By: wraggster

Seven years after the introduction of its first console, Microsoft is waging a new war with Xbox 360 - against itself. Phil Spencer, the general manager of Microsoft Game Studios Europe, believes the war can still be won.

Wondering just how big or small a part of Microsoft the division is? That total revenue of $5.53 billion was part of a $30.3 billion (£15.2 billion) total revenue in the same period, so some rough-as-they-come beer mat sums would tell you it's about 18.25 per cent - a proportion that, even allowing for the varied products contained in the division, puts to rest the sneery idea that Microsoft can simply afford to throw money at the brand. And sure enough, the 360 has hit Microsoft's business targets: in particular, Bill Gates' E3 2006 prediction that the console would sell 10,000,000 units by the end of 2006 was surpassed by nearly half a million.

But think about the figures for a moment. If 1.5 million 360s were sold by the end of 2005, 10.4 million by the end of 2006, and 17.7 million by the end of 2007, then the Xbox 360 sold significantly fewer units in 2007 than it did in 2006. The bad news doesn't stop there: 2007 saw its head start battered aside by the unstoppable Wii, with little chance of redress, and the PlayStation 3 reaching the 9.5 million unit mark worldwide. The only territory in which it outsold the PS3 was North America, and without the sales spike around Halo 3 things would have looked considerably worse.

It seems strange that this is the case. After all, with its obvious attributes and its late-2007 software lineup, why didn't the Xbox 360 dominate the year, and the Christmas period in particular? Microsoft began 2007 with a huge unit lead, its biggest game properties due to arrive on the shelves, plus a significant marketing spend, and in the event managed to sell less hardware than the previous year.

http://www.next-gen.biz/index.php?op...=9148&Itemid=2

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