Lewis: 360 cuts will "open mass-market floodgates"

With the price of Xbox 360 models slashed this week, Microsoft Europe boss Chris Lewis believes the aggressive move will help snare the elusive casual consumer, while reinvigorating the platform in places where it is being outsold by PlayStation 3.

Speaking to GamesIndustry.biz, Lewis, newly promoted to full oversight of Microsoft's entertainment business in Europe, said: "There are some sweet spots of pricing, particularly in parts of Europe, that do genuinely open up larger communities to the console and certainly Euro 199 is one of those pricepoints. It's a perfect time to open up the mass-market floodgates."

Coming in the wake of the demise of the Microsoft-backed HD DVD format, the price reductions are also designed to counter increasing Sony momentum, which saw SCEE president David Reeves boast earlier this year that PS3 had already overtaken 360's installed base in Italy, Spain, France and Germany, despite 360's head start.

"On a general level I certainly wouldn't trade places with any other platform holder right now," insisted Lewis. "Yes, I acknowledge that we're not where we should be in certain parts of the geography. We aim to rectify that and this step is a key stage towards it. You will see others, they will be significant," he added.

The entry-level Arcade unit at GBP 159 is now cheaper than Nintendo's mass-market friendly Wii, while the main Premium model, at GBP 199, is now GBP 100 cheaper than PlayStation 3.

Accepting that there have been flaws in the mission to conquer Europe to date, Lewis revealed: "We have to be more consistent, we have to be more single-minded about the message that we represent. It's making sure that we develop marketing and content there that is appropriate and that resonates with local tastes. I think we are getting consistently better at recognising that. I will say that in the early stages of the last version and this we were less fixated on that than we should be. I guarantee to you that will change."

He continued: "Let's take Spain as an example — we are heavily invested there, we've tripled the size of the team, we've put a warehouse in Spain that makes sense to the local retailers' need there. And we'll continue to invest in that way."

However, Lewis was keen to trumpet the overall strength of the platform, boosted significantly by its critically-acclaimed software portfolio and the growth of the Live online service, insisting that installed base is only part of the picture.

"We enjoy 42 per cent of that revenue share right now in this generation," he detailed. "That's a key milestone for us to have met and surpassed. We're also attaching just a little bit over seven games for every console — considerably ahead of where we stand with our competition. We have a strategic set of goals that revolve around our performance not only in terms of console volume, because to some extent, yes it's a key metric, but it's only one metric.

"There are others that make a lot of good economic and sound business sense that include our attach performance, that include our share of the ecosystem, that include the support we enjoy from publishers and retailers as a result of all of that. All of those elements go towards fuelling a successful business in my view." He added: "We are now much more of a mass-market entertainment proposition than we were."

Part one of the full interview with Chris Lewis can be read here.