A big part of the problem is the fact that many of the biggest 360 console exclusives are also on PC making the console a tough sell in the parts of Europe that are heavily into PC gaming. This is starting to change a little with Halo 3, Gears of War 2, Fable 2, Alan Wake, and some other games not appearing on PC but it's still a drop in the bucket when compared to the 360's competitors.
One way they could make the Xbox brand appeal more is to put more deals into place with existing and up and coming PC developers to make exclusive 360 games. Such games should be started from the ground up for the console only so that there's no backlash. They should also make sure there's a steady stream of such games so that people know their purchase will continue to have value to them in the future.
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