Wednesday, November 22, 2006

SIG: High X360 Attach Rate May Be a Negative

Microsoft's attach rate for its Xbox 360 just keeps on growing it seems. That's a good thing, right? Wrong, say SIG analysts Jason Kraft and Chris Kwak. They believe that the growing attach rate is actually a sign of the 360's poor health.

Each time Microsoft sends out a release to promote its Xbox 360 business, the company tends to highlight a number of statistics, including those for its expanding games portfolio, Xbox Live usage, and the Xbox 360 attach rate. Currently, the attach rate for the system stands at an impressive 5.2 games per console. But is this actually a healthy statistic? Susquehanna Financial Group analysts Jason Kraft and Chris Kwak argue that this high attach rate may actually be bad sign.

"If the Xbox 360 sports an attach rate of ten by holiday 2007, it will probably be because it has failed to gather critical momentum."

The duo continues by pointing out that the majority of 360 owners are the hardcore gamers and early adopters who typically buy more games. In order for a console's install base to grow, more casual gamers (who generally have lower attach rates) need to come on board...

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