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Microsoft Cautiously Optimistic About Xbox sales

By Thomson Reuters

NEW YORK (Reuters) - 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 told Reuters on Wednesday.

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.

The video game business is on track to grow 20 percent this year, Kim told the Reuters Media 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 Microsoft's interactive entertainment business unit.

Microsoft saw "record-breaking" sales of XBox 360 on the Black Friday weekend after the U.S. Thanksgiving day, which marks the start of the holiday shopping season. Sales were up 25 percent compared to last year's Black Friday weekend.

The XBox 360 also outsold Sony Corp's Playstation 3 by three units to one, he told Reuters.

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

Thomson Reuters, the global news and information company.