Microsoft has admitted for the first time that it delays the release of AAA titles on its Xbox Live store to avoid upsetting retailers.
The said the move was down to a fear of making retailers feel threatened, and in turn Microsoft's fear that retail would drop its console if they did.
Speaking at yesterday's MIT Business in Games conference, Xbox Games on Demand senior business manager Erik Yeager said: "We have a lot of strong partnerships with retailers," reports Joystiq. "We really need them to do a lot for us."
"They're the ones out there selling the consoles, selling the peripherals and, in this time, we're trying to figure out how to fit that in to the whole digital landscape shift. We're just taking a bit of a measured pace with it," he continued.
"We really strongly believe it's important to have these retail partnerships and the ability to sell our console is the most critical thing for us. If you don't sell the console, you can't sell anything else."
The unusually frank statement comes as rumours about the next Xbox grow. Retailers have privately expressed fears that if even just some of the rumours are true – such as the console blocking sales of second hand games – then they fear for their revenue streams.
At some retailers, sales of pre-owned games make up nearly 75 per cent of their revenues.