Microsoft Dreams of White-Hot Christmas

Company execs beam with confidence that the Xbox 360 is on track to hit its next major milestone this year.

Sony and Nintendo are grabbing headlines with their new hardware but Microsoft says people are still pouring their money into the Xbox 360, which the company says is on course to cross its next major milestone this year.

Chris Liddell, a chief executive at Microsoft, said in London this week that the company believes it "can sell 10 million Xbox 360 units by the end of the Christmas season", according to a Gamasutra report based on coverage in the Wall Street Journal.

This was echoed in comments by Xbox's Peter Moore to Bloomberg, who said: "The key is we're in stock, we're available, we're delivering well to retail. Certainly the consumer is recognizing the fact that we have a great price point as well as 160 games available and that flies in the face of our competition."

Microsoft is so confident for two reasons: Gears of War and Xbox Live.

Epic's third-person shooter has been one of the best-reviewed games of the year and it has already sold well over a million copies worldwide. Support for the game and its online modes has been so great that Sandvine, a communications equipment company, said this week that North American Xbox Live traffic spiked 80 per cent in the week after the game's release.

Another big contributor to Xbox Live is the recent addition of movie and TV content to the Xbox Live Marketplace in the US. Xbox Live's Aaron Greenberg told the Seattle Post Intelligencer that demand was "significantly beyond what anybody ever expected" over the Thanksgiving holiday weekend in the US, so high in fact that many people complained about slow downloads, being charged double and more.

The elephant in Microsoft's room is the increasingly claustrophobic size of the Xbox 360 hard drive. It's currently restricted to just 20 GB - inadequate by modern standings, especially considering the high-definition downloads now available.

There have been rumours of bigger drives coming, but right now Microsoft is happy with the current girth. Microsoft's Scott Henson told Next Generation that the company is assessing the demand for larger hard drives, but there is nothing definite yet.

Part of that reticence is likely down to timing. This Christmas marks the biggest sales period for the Xbox 360 since it debuted last November, and analysts expect Microsoft to sell up to 2 million consoles in December alone.

A report from iSuppli in November said that Microsoft was reaching a point where it could be making profit on the high-end premium Xbox 360, which contains the hard drive, while the core system is still running at a loss. Were Microsoft to bump the hard drive before the end of the year, it would undoubtedly upset this delicate profit balance.

Alex Wollenschlaeger
Editor, Kikizo