In a surprising turn of events, Japan is completely sold out of Xbox 360 hardware. Microsoft's Japanese branch revealed the news today, issuing an apology to customers and promising that the next hardware shipment would arrive in September.

The Xbox hardware has traditionally experienced low sales in Japan, but sales were apparently sparked by the recent Japanese debut of Namco Bandai's Xbox 360 exclusive Tales of Vesperia. The action-RPG is due out in North America next week.

"Currently, the Xbox 360 is sold out, and retailers are unable to restock their supply," reads the official Microsoft statement, as translated by Kotaku.

"This is a result of our own sales targets being exceeded by the actual customer sales," the company continued. "We deeply apologize for this inconvenience to our customers, retailers and business partners...We truly thank you for your patronage hereafter."

A similar sales boost accompanied the Xbox 360-exclusive release of Namco Bandai's Ace Combat 6 last year, though that spike did not lead to hardware shortages.

Microsoft has announced that the Xbox 360 editions of Harmonix's Rock Band 2, Neversoft's Guitar Hero World Tour and Zoe Mode's Rock Revolution will feature instrument interoperability, as revealed on Microsoft's Gamerscore Blog.

Citing a similar announcement made yesterday in which Sony revealed that the PS3 editions of the upcoming rhythm titles would see instrument cross-compatibility, Microsoft representative Chris Paladino stated, "For the record, we also do that."

"Consider this an official announcement," Paladino added. "All the instruments from Rock Band 2, Guitar Hero: World Tour, and Rock Revolution will be cross-compatible. In other words, welcome to the party."

While neither Microsoft nor Sony specified whether the three titles' guitars, microphones and drums would also see cross-platform compatibility between the Xbox 360 and PlayStation 3, the announcements bring the long struggle between rhythm game developers over peripheral compatibility to an end.

Xbox 360 maker Microsoft has denied that third party games--titles not produced by the console manufacturer--on the Nintendo Wii sell better than those on the Xbox 360 and Sony's PlayStation 3, contradicting a Nintendo statement from last week.

Citing data from sales tracking firm the NPD Group, Microsoft said that the Xbox 360's lifetime third party sales amounted to roughly 68M units, followed by the Wii at about 33.4M, and the PlayStation 3 at just under 20M. Third party titles appearing on the Xbox 360 sold 217,252 units on average, compared to an average of 132,517 on the Wii.

"No matter how you slice it, the Wii third party game story is not a pretty one," Microsoft interactive entertainment PR manager David Dennis told GamesIndustry.

In a GameDaily report last week, Nintendo said the Wii's third party titles were selling "better than our competitors," and provided a chart highlighting the Wii's software performance. Compiled with data from sales-tracking firm NPD, the... Read more

Continuing the recent trend of leaks, a new video showcasing the revised Xbox 360 dashboard and its game installation functionality has appeared on the internet.

In addition to game installs and Netflix streaming support, the new dashboard--dubbed the New Xbox Experience--will pack customizable Avatars and the original blade interface when it arrives this fall.

As previously reported, and demonstrated in the footage below, installed games will still require the disc to run as a result of piracy concerns.

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Following the release of Jonathan Blow's independently developed, time-warping puzzle platformer Braid, the developer has revealed that the Xbox Live Arcade certification requirements may have encumbered the title in its crucial polish phases.

"They removed some of the requirements for XBLA games, but there are still a lot of requirements," Blow told Gamasutra. "And I believe that, at least for a single-player game like my game, the vast majority of these requirements are unnecessary."

Blow continued, "I put in a tremendous amount of work meeting all these requirements, when I could have put that work into the actual game, and made it even a little more polished, little bit better."

The developer further noted that while the Xbox Live Arcade certification process is meant to ensure a standard of quality for games appearing on the platform, he believes that the amount of time and energy spent on passing certification has... Read more

Speaking at Microsoft's GameFest UK keynote, Xbox Europe VP David Gosen claimed that some 60% of Wii Fit owners played Nintendo's fitness-oriented, balance board-equipped title once and shelved it soon thereafter, noting that developers should be wary of pushing gimmicks in the place of solid gameplay.

"We've seen some research that says 60 percent of people who bought a Wii Fit play it once and don't play it again. So we have to get the balance right, because what we are doing is bringing new consumers into the market for the first time in their lives sometimes—and we have to treat them with respect," Gosen told attendees.

The executive later expanded on his comments, telling Develop that "what Nintendo have done with the Wii is truly fantastic—there is no question about it. But I think sometimes there is a thin line between gimmick and great gameplay."

The runaway success of Nintendo's motion-centric Wii console has prompted many software and hardware developers to look into motion-sensing control... Read more

Amid increasing revenues for digitally distributed games and downloadable content, a Microsoft executive affirmed his belief that digital sales will eventually overtake those of games sold in traditional retail channels in the near future.

"There's no question digital will overtake physical," said Xbox Europe marketing vice president David Gosen, as reported by MCV. "It happened in music and will happen to our industry."

Speaking at Microsoft's UK Gamefest development event, Gosen added that the success of Xbox Live Arcade and downloadable content for games such as Harmonix's Rock Band and Neversoft's Guitar Hero III illustrate a "convergence" in... Read more

Despite widespread interest in a downloadable Xbox 360 or Wii version of Rare's Nintendo 64 shooter GoldenEye 007, licensing issues and other concerns have the project "locked in a no-man's land," Rare senior engineer Nick Burton stated.

"The ball's not in anybody at Rare's court really," Burton informed Videogamer. "It's squarely in the license holders' courts. It's a shame. It's kind of locked in this no man's land. There's nothing on [Xbox] Live Arcade, there's nothing on Wii."

The Microsoft-owned studio had developed an Xbox Live Arcade port of the game but was unable to successfully acquire the rights from Nintendo, which originally published GoldenEye 007. Video game rights for the James Bond franchise, meanwhile, are owned by publisher Activision Blizzard.

"You've got the guys that own the license to the gaming rights now, the guys that have the licence to Bond as an IP, and there are umpteen licensees," Burton... Read more

Xbox 360 titles supplemented by paid downloadable content on the Xbox Live Marketplace sell an average of $21M more at retail, Microsoft interactive entertainment business manager Kevin Salcedo revealed at the company's recent GameFest event.

According to Gamasutra, the manager stipulated that the boost in sales typically required the content to be launched within a 30-day "sweet spot." The data reflects growing industry trends in which more and more games are arriving to retailers with DLC already available, or with content planned well in advance of release.

"Right now we have over 12 million users in over 26 countries, with $240 million in [Xbox Live Marketplace] transactions revenue so far, with $180 million... Read more

Microsoft today released a new system update for the Xbox 360, which users will be prompted to download when they attempt to connect to Xbox Live.

This update packs no new features, but is said to contain code to "prepare for the future growth of the service." A major system update, dubbed the New Xbox Experience, is planned for this fall, sporting a new 3D dashboard and the ability to install games.

"There are no other changes or enhancements in this update...in other words no new features," Xbox Live director Larry 'Major Nelson' Hyrb explained on his official blog.

The Xbox 360 avatars aimed to debut in the upcoming fall dashboard update will be restricted for use only in titles rated E10+ and lower by the Entertainment Software Ratings Board, Microsoft has revealed.

Speaking at Microsoft's GameFest event in Seattle, Xbox Live general manager Eric Kilgore explained that while the Avatars—Microsoft's answer to Nintendo's Miis—are currently planned only to be allowed for use in titles rated E10+ and lower, that restriction may change in the future.

"We are still developing the final policies," Kilgore stated, as reported by Develop. "The final guide we have this year is to think of them in an 'E10' context. That doesn't mean it won't change—but this Fall they won't be able to blow each other's heads off."

Kilgore further noted that the company is currently exploring various implementations of the avatar data, and noted that the avatars can be incorporated as full... Read more

Microsoft is preparing to slash prices on all existing models of the Xbox 360 hardware, going by the latest rumor out of Ars Technica.

The site claims the information came from the same source that provided early details on last month's pseudo price cut, which saw Microsoft debut an Xbox 360 model with a 60GB HDD for $380, while the remaining supply of 20GB units were reduced to $300.

The rumored priced cuts, along with the curren hardware prices, follow:

• Xbox 360 Arcade (No Hard Drive): $199, down from $279
• Xbox 360 Pro (60GB HDD): $299, down from $350
• Xbox 360 Elite (120GB HDD): $399, down from $449

During a conference call today, Activision Publishing CEO Mike Griffith detailed the company's expectations for console sales across 2008, revealing its belief that the PlayStation 3 will sell more systems than the Xbox 360 this year.

By the end of the current calendar year, Activision believes the consoles will sell:

• PlayStation 3: 8 million units
• Xbox 360: 6-7 million units
• Wii: 15 million units
• PlayStation 2: 4-5 million units

Griffith also noted the company's expectation that handhelds will grow "in excess of 24 million," but did not provide a specific breakdown between PSP and Nintendo DS.

European gamers make up "less than a quarter" of all Xbox Live memberships due to the various languages used in Europe, European Xbox VP Chris Lewis has stated.

"Up until fairly recently we just haven't had enough on the service for non-English speaking folks," he told gaming magazine Edge, as relayed by CVG. "On a community service like Live, [you need] enough people of a similar language orientation to get a community so that it starts to really blow out."

According to Lewis, the "lion's share" of Xbox Live members are located within North America, with the majority of European Xbox Live users being UK... Read more

Update: Microsoft has informed Shacknews that Xbox Live Silver members will only have free multiplayer access to select cross-platform titles--Universe at War, Shadowrun and Lost Planet: Colonies Edition--until the next system update arrives this fall.

"For a limited time, we are offering free online multiplayer on Xbox 360/Games for Windows titles that offer LIVE cross platform play," a representative explained. "This promotion won't last, so we encourage everyone to take advantage of it while they can."

The representative concluded that, "When the new Xbox experience launches this fall all multiplayer gaming on Xbox 360 will be for Gold members only."Original Story: Shacknews has confirmed that Xbox Live Silver members are now able to play some Xbox 360 games online, a feature once reserved for paying Gold subscribers.

Currently, only three titles allow free online play: Universe at War, Shadowrun and Lost Planet: Colonies Edition. Other games, such as Call of Duty 4 and Gears of War, still require a paid Xbox Live Gold subscription for online multiplayer... Read more

An early build of the next Xbox Dashboard update, which updates the system's interface and provides a wealth of new functionality, has been leaked onto the internet.

Though the update can only be installed on modded Xbox 360 systems, a number of shaky, fuzzy videos released by hacker xHaVoK87 show the new dashboard in action.

The demonstrated build is said to be a work in progress full of text errors, with promised features such as optional game installs and Netflix movie streaming not yet functional.

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Microsoft is set to release the new dashboard, which includes the option to use the system's original blades dashboard, at some point this fall.

Two videos of xHaVoK87's efforts to get the hacked update working follow... Read more

Bungie president Harold Ryan voiced disagreement with Microsoft over the publisher's decision to bump the Halo maker's latest project reveal out of E3, now slated to debut a future event.

"I certainly didn't agree with the decision to delay our news until sometime after E3," Ryan told Eurogamer. "Bungie is always concerned first and foremost with our fans. Whenever we are prevented from exceeding their positive expectations it is not a laughing matter."

Bungie teased a reveal of its next Halo project on its official website, with a countdown suggesting that more information would be made available during last week's E3 Media and Business Summit.

A letter from Ryan later appeared on the website the day before the scheduled revealing, claiming that "those plans were just changed by our publisher... Read more

Now that the multiplayer features of Games for Windows Live-enabled PC titles are entirely free, Microsoft says it will refund subscription fees to Gold-level Live subscribers, Games for Windows senior global director Kevin Unangst has revealed.

"There will be a benefit for customers who purchased gold subscriptions on Windows," Unangst told Ars Technica. "Proactively, we will be offering refunds for those with Windows-specific Gold subscriptions. Customer service has already begun to get communications prepared."

Many Games for Windows-branded PC titles including Bungie's Halo 2 and FASA Interactive's Shadowrun required a subscription to make use of features such as matchmaking and cross-platform play, effectively requiring a subscription for functional online multiplayer experience.

Games for Windows Live formerly featured a pricing structure similar to that of the Xbox 360's Xbox Live online platform, with Gold subscriptions costing $49.99 for a year, $19.99 for three months and $7.99 for a one-month subscription.

Earlier today Microsoft announced that all Games for Windows Live features will now be available for free, in addition to revealing a PC digital distribution marketplace that will launch this fall.

Later on, we had the chance to speak with Games for Windows senior global director Kevin Unangst on the announcement. Read on for the result of our extensive chat, which covered digital distribution, the changes to Games for Windows, and how Microsoft is thinking about the PC platform going forward.

Kevin Unangst: I think what Steam and Valve are doing is great for the PC, and I think they've been successful so far. I think there are areas in which we believe we will offer more value, not only to gamers but to publishers. So in some areas we will compete. But overall that's what's great about Windows--publishers and consumers get to choose. So there's plenty of room for more than one system on the platform. Read more..

Microsoft today announced that its Games for Windows initiative is set to expand with the launch an online PC gaming marketplace this fall. The service will deliver free and paid downloadable game content, along with trailers, demos, and other content comparable to the company's Xbox Live offerings.

In addition to the added features, the Games for Windows Live interface will also be redesigned to be "much more PC friendly." Microsoft has not yet specified whether full games will be made available for purchase on the network.

The company further announced that all Games for Windows Live multiplayer features are now entirely free.

Games for Windows Gold offered achievements, matchmaking, cross-platform play, and other features at a monthly subscription of $7.99, or $49.99 yearly. While the same features carry similar charges on Microsoft's Xbox 360 platform, gamers often criticized Microsoft for offering them at the same price on the PC, as free programs have traditionally offered comparable functionality.

Shacknews will be speaking with Microsoft later today on the announcement, so check back later for more details.