January 7, 2003

Xbox Live Subscriptions Double Expectations

Gamers can’t get enough - playing more than 2 hours every day

REDMOND, Wash. — New data released today by Microsoft indicates playing video games online via the Xbox Live™ service is quickly becoming the evening activity of choice for throngs of entertainment thrill seekers. Since the introduction of Xbox Live less than 60 days ago, more than 250,000 starter kits have been sold — double original sales expectations. The starter kit has been selling out in most locations in North America. According to data released by NPD Group Inc. (NPD Funworld TRSTS November 2002), in the first month of availability, Xbox Live Starter Kits outsold by 86 percent the number of PlayStation 2 Network Adapters Sony sold in its first month. Gamers have flocked to the world’s first high-speed video gaming arena fully dedicated to online gaming, spending an average of 2.5 hours per day playing online.

And it’s not just Xbox Live that is exciting gamers around the world. According to NPD Group Inc. data (NPD Funworld TRSTS November 2002), Xbox achieved its best month of the year for console sales in November. As reported last month by Microsoft, Xbox has reached a fever pitch this holiday, widening the gap between Xbox and rival Nintendo GameCube while demonstrating that Xbox delivers a superior gaming alternative to Sony PlayStation 2.

“The instant popularity of Xbox Live, combined with a successful holiday season for Xbox around the world, is concrete evidence that Xbox is securely in the number two position in this industry,” said Robbie Bach, Chief Xbox Officer. “Already, more than a quarter of a million people have discovered the thrill of Xbox Live, and we expect exciting growth over the next several months as these passionate endorsers share their experiences with friends and family.”

Xbox Live, which launched in the United States Nov. 15, 2002, allows gamers to play multiplayer Xbox Live games with other gamers everywhere on the Internet via a high-speed connection. With a built-in hard drive and Ethernet port, the Xbox console is the only video game system built from the ground up for online gaming, negating the need to buy additional, costly console peripherals or upgrades. Xbox Live enables gamers to easily find their friends; talk to other players during game play through the Xbox Communicator headset; download current statistics, new levels and characters to their Xbox hard drive; and play online — all exclusive features to Xbox Live.

Whether playing Xbox online or off, gamers can choose from a variety of best selling titles. According to Ubi Soft Entertainment, in North America alone, gamers snatched up nearly a million copies of Tom Clancy’s “Splinter Cell” in November and December, catapulting this Xbox holiday exclusive to the top of the Xbox video game sales charts. Illustrating the intrinsic allure of Xbox Live, game titles with Xbox Live capability (including downloadable content) led holiday sales. Three of the four best selling Xbox titles are all Live-enabled. According to the latest data from NPD Group Inc. (NPD Funworld TRSTS November 2002), “MechAssault™,” from Microsoft Game Studios, Tom Clancy’s “Ghost Recon” from Ubi Soft and “Unreal Championship” from Infogrames all attached at over 80 percent to the Xbox Live Starter Kit.

“It’s unbelievable. With Xbox Live I can play games and talk to my friends all across the country,” said Xbox Live gamer Michael Aguirre, age 21, from Fresno, Calif. “It’s an entirely new way to hang out. I can’t imagine ever going back to playing alone. Even my mom has tried it!”

Xbox Live Goes Global

Building upon the tremendous success of Xbox Live in North America, Europe prepares to go live March 14, 2003. Meanwhile, Japan is set to launch Xbox Live January 16, 2003 with SEGA’s highly anticipated Phantasy Star Online Episode I and II and three other exciting Live-enabled launch titles.

About Xbox

Xbox (http://www.xbox.com/) is Microsoft’s future-generation video game system that delivers the most powerful games experiences ever. Xbox empowers game artists by giving them the technology to fulfill their creative visions as never before, creating both Xbox console games, and now with the advent of Xbox Live!, online games, that blur the lines between fantasy and reality. Xbox is now available in the continents of North America, Europe, Asia and Australia.

About Microsoft Game Studios

Microsoft Game Studios is a leading worldwide game company with two core businesses: game development and publishing (http://www.microsoft.com/games/) and Zone.com. Zone.com (http://www.zone.com/) is the Internet’s largest game site.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide 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.

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Microsoft, Xbox, Xbox Live, and MechAssault 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.

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