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Xbox to offer digital rentals for Disney movies

E3: No price reduction for console

By George T. Chronis -- Video Business, 7/11/2007

FROM VARIETY: Microsoft plans a Wii-like controller for Xbox 360

JULY 11 | SANTA MONICA, Calif.—Microsoft Game Studios fought off temptation, in addition to rampant speculation by industry analysts, and did not announce a price reduction for the Xbox 360 during its July 10 press event at the Electronic Entertainment Expo here. Instead, the division is placing its bets on a strong release slate of titles led by Halo 3 on Sept. 25 and an agreement with Disney-ABC Domestic Television making Walt Disney Studios films available for download via the Xbox Live online service.

Two days earlier, Sony Computer Entertainment of America cut the price of its $599 60GB PlayStation 3 to $499 and announced that the 80GB model now on sale in South Korea would arrive in the U.S. this fall at $599.

Microsoft markets different configurations of Xbox 360s at $299, $399 and $479 and was thought to be under pressure to cut prices in response to Sony and the tremendous success of the $249 Nintendo Wii.

Earlier in the day, Microsoft VP Shane Kim told Bloomberg News that the Xbox 360 needed a lower price to increase sales and lure customers who aren't interested in traditional combat and racing videogames.

"We need to compete effectively for that customer and part of that is getting to the mass market price point for the console," Kim said. "We definitely are working on that area."

Yet when Microsoft Games corporate VP Peter Moore took the stage during the division's premier event, the emphasis remained on content.

In the Disney deal, 35 titles—including Bridge to Terabithia, The Queen and Déjà vu—become immediately available for download in high-definition and standard formats.

As part of the deal, future Disney releases will become available day-and-date with their home video counterparts.

Xbox Live has more than 7 million subscribers, and Microsoft expects to gain another 5 million during the next 12 months.

Moving back to videogames, Moore reiterated that the Xbox 360 has been the most successful next-generation platform at driving title sales, with 18.1 million games sold, grossing $2.4 billion.

"More games for the Xbox 360 have been sold than for the Wii and PS3 combined," Moore claimed. "Since last November, third-party titles have broken into the Top 20 18 times."

For now, Microsoft appears content that a strong software slate will drive its hardware sales, led by such best-selling franchises as Halo 3, Grand Theft Auto IV and Madden NFL 2008. Halo 3 is an Xbox 360 exclusive, and Microsoft sealed a deal with Rockstar Games on June 18 to pay the latter $50 million for two exclusive episodic installments for Grand Theft Auto IV. Other platform exclusives include Blue Dragon (Mistwalker), Lost Odyssey (Mistwalker), Mass Effect (Bioware) and Naruto: Ride of a Ninja (Ubisoft).

Moore did save a surprise for the very end of the event when he displayed an olive drab Halo 3 special edition Xbox 360, which will ship at the same time as the game. No suggested retail price or feature set was announced for the unit.

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