Microsoft VP Predicts Tough Times Ahead

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Microsoft’s Shane Kim says the company is “cautiously optimistic” about the Christmas shopping season, but admits that next year could be a rough one.

Microsoft announced earlier this week that Black Friday sales of the Xbox 360 were its best ever, with a 25 percent increase over the previous year, and that the system outsold the PlayStation 3 at a rate of three to one. A price cut in September has also resulted in a surge in European sales, almost doubling year-over-year figures.

But 2009 could be a different story, Kim said in an interview with Reuters. Microsoft’s vice president of strategy and business development for its interactive entertainment business said that despite a projected 20 percent growth in the industry in 2008, the failing economy has led to dramatically reduced expectations for next year.

“Who knows, maybe flat performance will be considered a remarkable achievement,” he said. “It’s difficult to predict the future.” He did note, however, that the gaming industry has done well in the past during times of economic uncertainty, because people are more inclined to seek less expensive, in-home entertainment options. “While they may cut back on large purchases like automobiles or appliances, they’re still looking for entertainment,” he added.

As a result, Kim said Microsoft is getting ready for “tough times” and looking for ways to reduce costs in the months ahead. “A big objective for us is to deliver most entertainment value for the dollar,” he said. It may sound like a common-sense approach but it could become particularly relevant if the economy continues to tank after the holiday, particularly in light of the fact that while the 360 may have beaten the PS3 on Black Friday, the Wii easily trounced them both.

via: Gamasutra

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