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Microsoft's Greenberg: 'PS3 Business' Is 'Hemorrhaging At Retail'

Microsoft's Greenberg: 'PS3 Business' Is 'Hemorrhaging At Retail' Exclusive

March 20, 2009 | By Chris Remo

March 20, 2009 | By Chris Remo
More: Console/PC, Exclusive

Following the release of NPD sales figures, Microsoft trumpeted its significant 53 percent year-over-year Xbox 360 sales boost -- and slammed primary competitor Sony.

Speaking to Gamasutra, Xbox 360 product management director Aaron Greenberg largely pinned the gain on continuing momentum, and said it outperformed external expectations.

"That exceeds even the high end of what analysts projected we would do for the month," he said. "I think the highest I saw was roughly 30 percent. We've had multiple months now of sustained year over year growth, which is fantastic."

As in past months, Greenberg highlighted the critical success of its titles -- "We have over 130 titles rated over 80 on Metacritic; no other platform even has 100 at that level," he pointed out -- as well as a per-system average software attach rate of 8.2, along with exclusive online content.

Chief among that exclusive content in February was Rockstar North's Grand Theft Auto IV: The Lost & Damned expansion distributed solely through Xbox Live. Greenberg did not reveal specific numbers, but did reiterate that it was "the most successful game add-on content we've ever launched."

"If that content was sold at retail, it would be one of the best sellers across all platforms," he added. "It would have outsold Killzone 2."

(Guerrilla Games' PlayStation 3-exclusive Killzone 2 sold 323,000 units in February, but while The Lost & Damned was on sale for nearly two weeks in that month, Killzone 2 was on sale for only several days.)

Greenberg declined to share specific sales data for any Live content, but noted that EA Canada's NCAA Basketball 09: March Madness Edition, recently launched over Xbox Live, has also been "very successful," in part due to the promotional mechanisms built into Live's current interface.

"It's another example of a great way to leverage Live to provide content that's very timely. You could never really deliver that kind of experience at retail," he said. "When people get [their games] in the Spotlight channel, it's in the millions of people who are clicking and looking and downloading. With our community being over 17 million, the scale when we get into some of those featured items is pretty big."

The executive painted a particularly bleak picture of the PlayStation brand at retail, saying retail partners have characterized it as "hemorrhaging," in part because many existing PlayStation 2 owners are migrating to Xbox 360 rather than PlayStation 3.

"You can't underestimate that we're half the price of the PS3 at a time when consumers were looking for great value," he said. "The PS3 was down in February two percent even with the launch of Killzone 2 -- that's months of year-over-year declines. Xbox continues to head north while the PS3 is heading south. We're gaining share."

"But what we hear from our partners is that it's not just PS3, it's also PS2 down 62 percent year over year," he continued. "With that business declining, and with the PS3 business declining, it's been described to me as hemorrhaging at retail right now, and it just keeps getting worse.

"What we're finding in our research is that a large portion of the volume we're driving with Xbox 360 purchasers is actually PS2 owners choosing Xbox for the next generation. We're switching people from the PlayStation brand over to the Xbox brand."

The Xbox 360 version of Street Fighter IV outsold its PlayStation 3 counterpart in February, but only by about 11 percent; the two games occupied the second and third places in the month's software top ten. "We're hearing the same early returns for Resident Evil," Greenberg noted. He said what's more important is the growing perception that brands formerly associated with PlayStation are now also available on Xbox.

"Not only is [Resident Evil 5] selling more, but we did a limited edition Elite bundle with that as well -- so we've obviously benefited from having this deep partnership with Capcom, and we're excited to have the Resident Evil franchise for the first time ever on our platform," he said. "That follows in the steps of [franchises like] Grand Theft Auto -- and we all know Final Fantasy is coming -- that have been historically associated with PlayStation."

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