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Gamers Respond to Extraordinary Xbox Value Proposition

Since the European price reduction took effect April 26, weekly sales are running neck-and-neck with PlayStation 2. Based on week-to-week sales since launch, Xbox represents 49% of the next generation console market in the United Kingdom(1), 46% in France and 55% in Germany(2).

Already-strong attachment rates for Xbox games have increased as well with an average of 3.7 games purchased for each Xbox video game system in the United Kingdom(3). Award-winning Microsoft Game Studios title "Halo" (recently awarded Game of the Year, Technical Achievement of the Year and Audio Achievement of the Year by influential industry magazine Edge) built on its success, with an average attach rate of 88%(4). Increased European sales have taken "Halo" well past the one million sales milestone worldwide.

"Our customers have reacted positively to the price drop and we have seen an uplift in sales since April 26," said Alex Croft, head of buying for GAME Stores Group Ltd(5). "This activity reaffirms Microsoft's commitment to the market and highlights the excellent value Xbox now represents to our customers."

"I'm glad that more gamers in Europe are able to experience Xbox for themselves," said Sandy Duncan, vice president, Xbox Europe. "Our strategy is to give outstanding value to as many consumers as possible, and the increased Xbox sales since the price reduction indicate that strategy is on track. The new price allows us to be more competitive and make serious inroads into the hearts of European gamers leading up to Christmas, 2002.

"As we've said before, this is a marathon, not a sprint -- and these initial figures are extremely encouraging," said Duncan. "But it is delivering great games and great experiences to hundreds of thousands of happy consumers in Europe over the long term that is our most important goal, and we will continue to drive initiatives to continue this cycle of success." In addition to the new price point, word-of-mouth recommendations and stellar reviews are driving gamers to the great games available on Xbox.

About Xbox

Xbox 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 games that blur the lines between fantasy and reality. Xbox is now available in North America, Japan, Europe and Australia. More information on Xbox can be found at http://www.xbox.com/.

About Microsoft

Founded in 1975, Microsoft 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.

     (1) Data from ChartTrack, 29 April 2002
     (2) Data from GfK, 7 May 2002
     (3) Data from ChartTrack, 29 April 2002
     (4) Data from ChartTrack, 29 April 2002
     (5) The GAME Group plc, Europe's largest retailer of video games and
         computer software (formerly The Electronics Boutique plc)

This document is provided for informational purposes only, and Microsoft makes no warranties, express or implied, with respect to this document or the information contained in it.

Microsoft and Xbox 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. Prices quoted are estimated retail prices and may vary due to local VAT rates.

SOURCE: Microsoft Corp.