ith the holiday shopping season about to be in full swing, we sit down with the big three console makers, get their thoughts on their 2007 year, why consumers should want their respective console this year, plans for after the new year and much more.

Today’s contribution comes from Microsoft’s Corporate Vice President of Marketing, Interactive Entertainment Business, Jeff Bell. Bell more or less made his debut at this year’s E3 by getting whooped in Madden by Reggie Bush. With Peter Moore moving over to Electronic Arts, expect to see more from Bell on Microsoft’s side.

With the Xbox 360 cleaning up on the software side and crushing online with Xbox Live, we find out if having four different versions of Xbox 360 is confusing to the consumer. How has the failure rate of Xbox 360 been as of late, and what is the company doing to prepare for the holidays customer-service wise? What about this internal HD-DVD Xbox 360 rumors that keep coming to the surface? What other third-party exclusives are Microsoft pursuing? Bell answers all this and more in part two of Holiday Presence.

Game Informer: This is the third holiday season for the Xbox 360. How are you feeling about the 360 platform right now?

Jeff Bell: We wouldn’t trade places with anyone. We feel really good about our position. In terms of our increasing hardware sales, we really, really feel good about our position relative to about a year ago. We’ve implemented a very clear and thoughtful plan that started with the first quarter of our fiscal year when we made an increase in value around our three SKUs, which then saw our sales move up. We did that concomitant with the launch of Madden ’08 here in the United States. We waited a little bit longer in Europe to take advantage of soccer or football season there as well, which was with the Pro Evo and the FIFA launches. Obviously, we’re really pleased about a further step-up in our sales rate with the launch of Halo 3, which I think exceeded even very high expectations. Now, coming into the holiday, we feel very good about the all-new lineup, which is very focused upon the consumer targets, with the Xbox 360 Arcade at $279, with five games in box, including the legendary Pac-Man and Uno, Luxor, Feeding Frenzy and Boom Boom Rocket, with the addition of a wireless controller and memory unit. The other big news, which has received a very positive response is the addition to both the Xbox 360, otherwise known as the Pro SKU, and the Xbox 360 Elite of both Forza 2—a very highly rated, very fun racing game, as you know—and Marvel Ultimate Alliance, a very easy pick-up-and-play game rated in the mid-to-high 80s for up to four people on the couch to be able to play. So we feel really good about that, coming into the holiday. And just the launch of a lot of exciting games. We feel like we’ve got the broadest appeal. We’ve clearly continued our focus on the core audience, with titles like Halo 3 and Mass Effect—a very highly acclaimed game. This is outstanding. It’s the closest we’ve come to playing a movie. The Project Gotham Racing 4. But also the lighter side, the Viva Pinata Party Animals, which is very easy to play, very targeted toward younger children. And then the launch of SceneIt?, which we’re very excited about, with four controllers in the box, for a high-value add. It’s one of the highest selling board games of all time, and early indications are that it’s selling very, very well at retail. So very broad appeal from our own Microsoft Games Studios, and then clearly some tremendous, tremendous titles from our third parties. I spent more hours than I should say this weekend on Call of Duty 4. My son was playing Assassin’s Creed—great games. We still have more to come, with a lot of great titles—almost too many titles, you know, in some peoples’ minds. I consider it to be one of the most euphoric moments we’ve ever had.

GI: Obviously, Sony and Nintendo are coming with their second holiday titles, and some big ones, too. If someone is on the fence right now, why do you think they should pick up a 360 instead of a Wii or PlayStation 3?

Bell: I really believe that for consumers, our messaging has been “The greatest choice and the greatest value.” The choice message is one clearly of hardware. We’ve got something for family and social gamers. We’ve got something for the high-end, hardcore gamer. With the Elite, we’ve got the middle of the market. Also, choice in terms of being able to have the broadest array. Whether it’s Guitar Hero III or Rock Band or SceneIt? Or the Viva Pinata franchise, Crash Bandicoot—you know, there are a lot of different games to play for fun, lighter fare. And then there’s also the strongest lineup of action and adventure and role-playing games, whether it’s Blue Dragon or Mass Effect. Obviously, Halo 3, Call of Duty, Assassin’s Creed—the list goes on and on of games that are playing in high definition. We feel very good, and I think that people who are in the know understand that our game-development community is really supportive of all third parties, and we’re seeing the benefits, both from Microsoft Games Studios as well as third parties, the incredible revolution in gameplay, running at 60 frames per second on even the sports titles. Whether it’s the Madden or the FIFA or the NBA games, everything is there for people to pursue their passion. So that choice and that value that we bring, we feel that it’s stronger than any other competing offer from either Nintendo or from Sony.

GI: You’re talking about the variety of choices that people have. I was at a retail store over the weekend, and I literally saw a mom standing in front of the Xbox 360 kiosk, and there were four different SKUs. You had the Elite, the Pro, the Halo edition and then the Arcade. She sat and stared for about a minute, then she picked up the phone and asked, “Which one are we supposed to get him for Christmas?” Do you think having four different SKUs is a little confusing for the consumer?

Bell: Well, the good news is she bought one. You know, there is a potential that four is more confusing than one. I have a lot of respect for the consumer. I look at, for instance, being at Best Buy last evening myself, doing some holiday shopping, I think I saw 47 different cellular phones on display. I look over at the appliance section, and I think there must be two dozen different refrigerators that people can look at. I have a lot of respect for the intelligence of the savvy consumer. For us, we really have three. The special-edition Halo 3 system is for the fanboys, and there are a few left—although there aren’t that many left after the launch. So I think we’ll get back to three there. We change the exterior packaging as well to make it a little simpler for people to see what the contents are, using graphics and major messaging. So that’s a good problem to have. I think the three price points, the content that’s held within, should allow people to find the system that’s right for them. I think the one common denominator with all of those is again the competitive advantage we hold with Xbox Live. It is a free service. People can plug in and make available all of the features of Marketplace, whether it is the Arcade games that are very affordable. We continue to get closer to over 100 games for this holiday that people can download and play for 500 Microsoft Points, which is 6 or 7 dollars, which makes it much more affordable for families. Or on the Marketplace, to be able to preview the demos and the trailers of games that have come out. So we’re feeling like in any of those three choices, people are going to be able to find the thing that’s right for them that gets them the most joy and happiness as a family.