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 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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