Microsoft at BMO Nesbitt Burns Interactive Entertainment Conference - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

PETER MOORE, CORPORATE VP, INTERACTIVE ENTERTAINMENT BUSINESS, ENTERTAINMENT & DEVICES DIVISION, MICROSOFT CORPORATION: Good morning. What you just saw there was a 60-second part of our brand campaign that is running right now in Europe as [it] continues to build upon the branding position that we have with the Xbox [360] platform, one of social and one of [products].

The ability for us to bring to [life] this platform, particularly with entertainment appetites like that, are tied to the work which we did last year. Many of you [will] remember water balloons and jump ropes as the branding (inaudible) we try and bring Xbox 360 (indiscernible) around the world as a platform that brings people together to enjoy entertainment in different and varied ways. We will continue to build on our brand with advertising [like that].

So when we look at what we're doing right now in the space of [global base] (indiscernible) an actual [critical] [holiday] we are still sticking to our basic [tenet] which is (inaudible) the Xbox 360 platform.

Firstly, and at the core of the experience of course are your games. As you can see here -- I'll talk a lot about the games today -- we have a wide diversity of games (inaudible) are available (inaudible) the Xbox 360 [this holiday] (inaudible).

When we layer on top of that your friends, we are going to talk a lot today about Xbox Live, of course; but the ability to bring people together in different ways, likeminded individuals that like to play games; but also folks that like (inaudible) utilization. For example, we have the Xbox Live digital camera, video chat, (indiscernible) wireless accessories (inaudible) and wireless headsets would be one of those.

4 million strong and growing, the Xbox Live community is the future of our platform. The future, quite frankly, of how we come together (inaudible).

Then finally, this is your lifestyle. As we have said all along, the ability for [her] to be able to bring this [logically] together, (indiscernible) [connection]. Scenarios that bring together connected entertainment, (inaudible) whether it is an [HD] DVD player that ships in the next week here in the U.S.; or whether it is the ability to bring celebrities, whether it is artists, athletes together for things like (inaudible).

Then of course, as we go forward here, we will be shipping Zune next week, the ability to integrate deeper our device strategy as a corporation at Microsoft, ties together the entire digital entertainment lifestyle (inaudible).

So let's look at where we are at today. As you talk of our own (indiscernible) couple weeks ago, (inaudible) 6 million sold mark. We are well on target on a global basis to sell (inaudible).

We reiterate our guidance of 13 to 16 million installed by June 30, 2007, the end of our fiscal (inaudible). 160 games I said this holiday [for] the Xbox 360. And as well for Xbox Live Arcade, which again I am going to talk about here in (indiscernible) because it brings a broader reach into the community that we have had so far with the Xbox platform.

Then when we look at the attach rate, these are the important numbers. This I think gives you some indication of the [health of this]. We [earned] a record-breaking attach; I am quoting here are September [FTD] numbers of 5.1 games sold for every console.

Perhaps equally importantly from a revenue and a margin point of view, 2.9 accessories driven quite frankly by wireless -- wireless controllers, wireless headsets. The ability for us to be able to drive extra revenue for ourselves and the entire ecosystem is self-evident here. This as you know, is a scale business. Our belief is we can continue to maintain strong attach rates even as our business scales.

One of the things that we are doing a lot better in this generation than quite, frankly, we did in the previous generation is have a diversity in our portfolio of games. Whether it's the exclusives that you can see there, exclusives playing a large part in the portfolio.

Whether it is a broader look at family friendly, something we didn't do as well with Xbox 1. But now when you have titles like Viva Pinata, LEGO Star Wars, Open Season, Sonic, and of course Banjo-Kazooie coming from our studio in the UK and Rare, now we are getting earlier into the broader demographic, much earlier than we did in Xbox v. 1. You look at Platinum Hits and the ability to bring popular titles that have already hit record-breaking numbers to consumers as early as this holiday at price points they can start to afford.

Then finally, key franchises. The ability for us to be able to make sure on a competitive level that we don't have our competitors having franchises that are exclusive to their box, from a third-party point of view, it is critical in this next generation. I think you have heard it many times if you follow our industry. Because the stakes are so high, there is going to be less and less third-party exclusives going forward.

As publishers, it is very difficult for you to justify on an opportunity cost basis focusing on a single platform. Where we have the strength is building our third-party portfolio out to make sure we have the right reach; but as well making sure that we have all of these (inaudible) fabulous franchises that our third-party publishers have to offer. That gives this broad reach to the portfolio that has something for everybody.

So as we look at what we have got going, on a third-party basis, the ability to have content that is exclusive to your box, that clearly shows off not only the power of what you're doing with the hardware, but also the concept of building community gaming through multiplayer. And nothing does that better than this title, Gears of War, which ships today.

First of all, you can see the numbers. Over 300,000 pre-orders already in place here in the U.S., when we compare that -- only second to Halo 2 on a pre-order basis. It is the fastest new selling [idea] of the next generation. I think most importantly, you can see the [re-scores] it is getting.

Now on top of this, the embargo was lifted this morning about an hour ago on the review scores for magazines and publications. On top of the two review …