One year ago, the Xbox video game system was the new kid on the block. Today, Microsoft Corp. confirmed that Xbox was a top holiday seller and is now firmly entrenched in the No. 2 market position in the United States and Europe. According to the NPD Funworld TRSTS December 2002, Xbox significantly widened the gap between the competition, established itself as the clear No. 2 video game platform and brought the overall next-generation market share for Xbox to 24 percent. Xbox console sales in December had a year-over-year growth of 48 percent, which was the highest among all next-generation platforms for the month according to the NPD data. On the other side of the Atlantic Ocean, Xbox also won additional market share, bringing the European share of Xbox to 19 percent (ChartTrack and GfK, November 2002).

December was the largest selling month for Xbox consoles ever, beating the previous record month, November 2001, by 43 percent (NPD TRSTS, December 2002). Also according to the data, December was the largest month ever for Xbox software sales, beating the previous record month, December 2001, by 80 percent. Xbox also enjoyed a nearly 4.8 attach rate, the highest for any next-generation console after 14 months in the market. Moreover, Xbox sold the most software of any next-generation system after 14 months in the market. Finally, the Xbox Live (TM) service continued to be a major hit at retail in December, selling 70 percent more Xbox Live Starter Kits in the first two months than the PlayStation 2 network adaptor sold in its first two months.