So it's pretty safe to assume that Microsoft has some pretty big plans for the second half of the year that it's not ready to talk about yet.

[Laughs] That's very safe to assume. We definitely have a lot of cards in our back pocket that we have not played yet, and we're very excited to, throughout the year, share more about what we believe are pretty significant announcements around the Xbox 360 experience and games that will drive people to purchase our console versus the PS3.

I'm sure you've seen the insane Wii figures. 721,000 sold in March in the US.  What's Microsoft's take on that?

We think Nintendo's success, to be honest, is great for us. They're doing great things to help broaden the audience in the industry. We're playing a role as well. And Xbox is a great complement to that experience. It's interesting, because we're not really targeting the same consumer with the same kind of experience, but in many ways we're finding that as we grow and broaden...a lot of that audience is going to be graduating up from the Wii experience. We think we're a great complement to that. What Nintendo's doing is great for the industry, but it's great for us as well.

The attach rates for Xbox 360 continue to be strong, standing at 7.5.

And that doesn't include any digital transactions at all. In the history of all NPD data across multiple generations, no console life cycle has ever attached anywhere near 7.5 games.

moscalloutBoth in the US and in the EMEA, we're seeing our preorders for GTA IV outpacing the PS3's by a 2:1 margin./moscallout...That really speaks to our strength with the consumer, frankly. I think the battle for the core user is sort of over, if you will. We're heading now well beyond 20 million in console sales. I feel we've secured that core buyer, and that gives us quite a bit of an advantage versus PS3, which is late to the game and still at a price disadvantage relative to the Xbox.

That's quite a claim to say that the battle for the core user is over. PlayStation 3 has got LittleBigPlanet, Gran Turismo 5 and Metal Gear Solid 4 coming. Do you really feel it's safe to say that you guys have won the core?

Yeah. I think the type of audience that they are going after with many of those games, frankly, are Xbox 360 owners...They're trying to go after a consumer that has already bought an Xbox 360, and frankly has a much broader lineup with more titles and more exclusives. You could say that they showed up with too little, too late.

The PlayStation brand is still very strong in Europe in particular. We're hearing that outside of the UK, the Xbox 360 is dying.

Without a doubt, Sony is a very formidable competitor in Europe, and they have entrenched themselves as an established brand, and we recognize that. But it's also part of the reason why we say Europe is the battleground territory for us this generation. So we've really double-downed our efforts there in marketing spend and our aggressiveness in that market.

In Europe, the core consumer is still very much up for grabs, and we will continue to do things in Europe that we may not do globally, because we see that market is so critical to our success. We've launched a massive TV advertising campaign--multi, multi-million campaign across the region that launched before anything in the US...The second thing is that in advance of GTA IV, we've dropped the price of Xbox 360. We're now a lower-priced console throughout Europe. We're cheaper than the Wii, and just about half the price of a PS3. The result of that is our sales doubling, sustained over a number of weeks now, across Europe.