Global slowdown likely to hurt XBox sales

New York: Fresh off strong Black Friday sales of its XBox 360 videogame consoles, Microsoft Corp is "cautiously optimistic" about the holiday shopping season, a senior executive said on Wednesday at the Reuters Media Summit.

But things could get tougher next year, said Shane Kim, Microsoft's vice-president of strategy and business development for the videogame business, as the economy gets sicker and people cut back spending even more.

On track, for now

The video game business is on track to grow 20 per cent this year, Kim said at the summit in New York, but "people are not projecting that kind of growth" for 2009.

"Who knows, maybe flat performance will be considered a remarkable achievement," Kim said. "It's difficult to predict the future," he said, adding that the gaming industry has traditionally fared well in economic downturns as people turn to stay-at-home entertainment.

"While they may cut back on large purchases like automobiles or appliances, they're still looking for entertainment," said the executive, who focuses on strategic planning and partnerships for Micro-soft's interactive entertainment business unit.

Microsoft saw "record-breaking" sales of XBox 360 on the Black Friday weekend after the US Thanksgiving day, which marks the start of the holiday shopping season. Sales were up 25 per cent compared to last year's Black Friday weekend. The XBox 360 also outsold Sony Corp's Playstation 3 by three units to one, he said.

Kim said his unit is planning for "tough times" and assessing where costs could be saved. "A big objective for us is to deliver most entertainment value for the dollar," he said.