Robbie Bach Discusses Xbox Performance In 2004

Robbie Bach, Microsoft's Senior VP for the Xbox division, has released a 'public letter' during this week's 2005 Consumer Electronics Show in Las Vegas, giving some notable new facts and figures about the Xbox's apparent performance in 2004. Since Bach's missive is a public address, rather than an SEC filing, few negatives are included in the piece, but several interesting stats are discussed nonetheless. In particular, the key statistic Bach focuses on is the 'year-over-year' performance of the Xbox and its competitors, Sony's PlayStation 2 and Nintendo's GameCube. By the metric of performance in 2004 vs. performance in 2003, the Xbox did very well -- and, Bach takes pains to point out, the competition struggled. "Based on NPD data for November and internal sales data for December," said Bach, "Xbox won the critical Christmas season in the United States, garnering a projected 40 percent market share. In the same timeframe, Xbox console sales propelled forward with an 11 percent increase compared to this time last year. At the same time, our competitors experienced year-over-year declines – PlayStation 2 dropped an estimated 40 percent, and GameCube sales fell an estimated 47 percent." Extreme shortages of the new slimline PlayStation 2 likely contributed to Sony's issues, though Xbox shortages were also reported in some areas. While this is certainly true, note that the market shares Bach mentions first apply only to the Christmas season -- which, to be fair, is the most important time in videogame retail -- and second, makes no mention of where each of the three competitors stand in terms of other important statistics like total market share, total install base, or even basic gross or net profits. Nonetheless, this is still an impressive statistic for Microsoft. On the software side, Bach claims that Xbox software sellthrough volume has increased 77 percent over the same time last year, in no small part due to the multi-million selling Halo 2. Fable was also a strong seller for Microsoft Game Studios, selling "more than 1.3 million copies since its launch in September." It will now be interesting to see whether Xbox game sales will again increase in 2005's year-over-year performance, with the rumored coming of the Xbox 2 not so far away.