Xbox Surpasses Five Million Consoles Milestone In Europe

London, 28th January 2005 - Xbox today announced that it has smashed through an important milestone in Europe, selling five million consoles since the European launch in March 2002.

Second-quarter financial results announced by Microsoft show that Xbox has sold 5.0 million consoles life-to-date in Europe up to 31st December 2004. A steady stream of fantastic-value offers at retail throughout the year, the limited edition Crystal Console, Xbox Live consistently setting new standards for online gaming and blockbuster titles like Halo 2 (Microsoft Game Studios), Fable (Lionhead Studios) and FIFA Football 2005 (EA SPORTS) made Xbox an irresistible choice for gamers in Europe.

Through the December quarter, Xbox sold 19.9 million consoles worldwide since launch - 13.2 million consoles in North America, 5.0 million consoles in Europe, and 1.7 million consoles in the Japan and Asia Pacific region.

As previously announced, 2004 was a great year for Xbox in Europe:

• Xbox was the only platform to see year-to-year growth during Q4 as well as the full calendar year 2004, while the overall market was down year-to-year.

• Xbox market share for 2004 was an impressive 29.5 percent, increasing 7 points from the 2003 calendar year.

• Overall software sales for Xbox lead the way in 2004, growing units sales 44 percent during Q4 and 48 percent for the calendar year 2004.

• The Xbox Live online gaming service has surpassed more than 1.4 million members around the world, cementing its place as a leader in the digital entertainment landscape

• The launch of Halo 2 (6.4 million copies sold world-wide and counting) was a huge highlight for Xbox fans in 2004 - and there's no let up in 2005. Hotly anticipated titles like Forza Motorsport, Conker: Live and Reloaded, Jade Empire, Grand Theft Auto: San Andreas, and Splinter Cell: Chaos Theory are just some of the fantastic titles coming for Xbox in the first half of this year.

"The five million console milestone is a major one, and proves that our strategy of offering consumers exactly what they wanted is the right one," said Neil Thompson, Director of UK home and entertainment division. "We are looking forward to seeing our strong position in the market going from strength to strength, and we're right on track to hit our worldwide shipment goal of 21-22 million units by the end of June 2005. Xbox offers more power than any other console on the market, a killer games portfolio including the already-classic Halo 2, and broadband built in from launch for instant online gaming with Xbox Live - an irresistible proposition. The choice gamers had to make at Christmas was a tough one but the numbers show that Xbox was the first choice for a significant number of people."

About Xbox

Xbox (http://www.xbox.com) is the video game system from Microsoft that brings people together for the most exhilarating game and entertainment experiences. Xbox delivers an expansive collection of breakthrough games, powerful hardware and the unified Xbox Live online service. The tagline, "it's good to play together," captures the spirit of Xbox as the social hub of the new digital entertainment lifestyle. Xbox is now available in Europe for an estimated street price of €149.99/£99.99.

About Xbox Live

Xbox Live is the first comprehensive, online game service fully dedicated to fast-action broadband gaming experiences. Xbox Live allows gamers to play multiplayer Xbox games with other gamers everywhere via a broadband Internet connection. With a built-in hard drive and Ethernet port, the Xbox console was built from the ground up to be an online gaming system so there's no need to buy additional peripherals. Xbox Live enables all gamers to find and play with their friends easily; talk to other players during game play through the Xbox Communicator headset; and download current statistics, new levels and characters to their Xbox hard drive.

About Microsoft

Founded in 1975, Microsoft (Nasdaq "MSFT") is the world-wide 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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Marie-Claire Suter

UK PR Manager - Xbox & PC Games

Tel: +44 (0) 118 909 4599

Email: i-maries@microsoft.com