Cloud over Xbox 360 hides silver lining

By Craig Zammit

SYDNEY: Microsoft’s recent US fourth quarter earnings report for its Xbox 360 console and its 61 per cent drop in console shipments prompted media reports of plummeting sales and continued misfortune, however local GfK data paints a different picture.

Despite the Q4 earnings report revealing a seven per cent profit boost to $US3 billion and a revenue increase of 13 per cent to $US13.4 billion for the US fourth quarter, the drop in shipments from 1.8 million units in Q4 2006 to 700,000 in Q4 2007 has led to press reports that the company is losing sales.

However, GfK Australia account director, Daniel Morse, believes this conclusion is not justified.

“If you look back at what was happening in the US during the fourth quarter last year there were some important software releases, such as Elder Scrolls IV Oblivion, which really drove console sales and spiked interest in the console,” Morse told Current.com.au.

“Software has always been a driver for hardware, so to compare to that period is a little misleading.

“Here in Australia the console still does well week-on-week in terms of sales – it services its customer-type very well. If you look at the content available on the Xbox 360, it has some of the best games available and also some of its biggest games yet about to come out,” Morse said.

With 181,669 units sold since launch in Australia, according to GfK data, and a 10 per cent increase in unit sales for the Australian second quarter to 21,548 units, up from 19,677 units in Q1 2007, it would appear the much-troubled console is still performing well.

Recently-resigned Microsoft Interactive Entertainment Business – entertainment and devices division (EDD) corporate vice president, Peter Moore, announced at E3 2007 in Las Vegas recently that Microsoft had planned to ship 12 million consoles worldwide by the end of June 2007 – they achieved 11.6 million.

The coming holiday season will see Microsoft hedge its bets on several major gaming releases, including Halo 3, Grand Theft Auto 4 and Rock Band, to make or break the gaming console.

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