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XBox (Games)

Microsoft Plans Deliberate Xbox 360 Shortage 451

Posted by samzenpus
from the fight-over-it dept.
An anonymous reader writes "To ensure an immediate "sellout" of the Xbox 360 on launch day (therefore getting lots of media buzz about their new console), Microsoft will simply restrict the supply down to a trickle. My favorite part of the article: "In addition to limiting the per-store stock of consoles and having the retailers prepare to prominently note the unit's "sold out" status, Microsoft has allegedly asked Norwegian retailers to sign an agreement that they'll sell out of the consoles on the launch date." Looks like it's not a rumour.
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Microsoft Plans Deliberate Xbox 360 Shortage

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  • by Anonymous Coward on Thursday November 03, 2005 @09:09AM (#13940072)
    Oh, boy. This sort of dishonesty is becoming more and more rampant in corporate culture. As companies become larger and more powerful, they are less susceptible to the consequences of their actions. Remember Microsoft's use of fake "grassroots" letters to the editor in city papers nationwide? Or how about Sony's more recent debacle where they were caught red-handed installing rootkits on their customers computers? Of course it does not help that the US is headed up by an equally dishonest administration....

    • by hey (83763) on Thursday November 03, 2005 @09:20AM (#13940118) Journal
      > This sort of dishonesty is becoming more and more rampant in corporate culture ...

      Becomming?
      This is Microsoft...its the way they have always been.
    • by dgrgich (179442)
      How is this dishonesty? If a company wants to dole its products out in a piecemeal fashion to create buzz, I can't say that I see anything wrong with this. It is within the rights of the manufacturing company to release its products in whatever fashion it sees fit. Why is Microsoft obligated to do a mass push that might result in consoles left on the shelves and thus give the media the chance to say that Microsoft was unable to sell out in its first week?
    • by Billly Gates (198444) on Thursday November 03, 2005 @01:53PM (#13942453) Journal
      I learned supply and demand fromd day1 in both my micro and macro economics classes. Its the basis of how the whole market works and its not dishonesty at all.

      The sole reason we have price tags is because we have limited resources.

      The economy works by supply and demand and if too much supply hits a market which erases demand then competitors leave and it self corrects. Its Microsoft's job to maximize every penny of profit as possible to establish its price equilibrium. To do that it must limit its supply so it can make more money.

      But its an industry wide practice and not dishonest. Suppliers all the time decide how much to produce something and use what consumers are willing to pay for to set the price.

      • A Good Example (Score:3, Interesting)

        by Audacious (611811)
        A good example of supply and demand taking their toll is the Wizards of the Coast selling of Magic:the Gathering cards. When M:tG first came out only a few thousand sets were made. People went crazy over the game. So the next set was double the first, the third doubled that again.

        Then the complaints began coming in. It seemed that some distributors were hoarding boxes of cards until the price had risen sufficiently to where they could break the box and sell the individual cards. WotC decided, therefore
  • Boo Microsoft! (Score:2, Insightful)

    by Bobvanvliet (569014)
    But ah well, Sony probably does the same thing. It's the media/customers that are kinda stupid for falling for these schemes...
    • Apple too. Yes, I love Apple (so gimme all your mod points), but they do seriously oversell their products when they know full well they won't be able to meet demand.
      • Apple too. Yes, I love Apple (so gimme all your mod points), but they do seriously oversell their products when they know full well they won't be able to meet demand.

        I didn't think this was a marketing gimmick, but a result of Apple practising just in time [wikipedia.org] manufacturing. IIRC that has been their modus operandi for years. There was that period when they actually weren't producing or selling iMacs because they weren't getting the processors on time allegedly, and that wouldn't be a wise marketing gimmick

        • Re:Boo Microsoft! (Score:2, Insightful)

          by Ansonmont (170786)
          True. Apple often would not have enough of their "hit" products. But usually not at launch (unless there was a manufacturing glitch). From my experience selling Apple and other computers, it would seem that Apple, like most MFRs, does not really know HOW popular a particular product would be. Newton, not so popular, lots of Newton's were available. Same with the Cube. First PowerBook though was very difficult to get for awhile. Same with iPods in the early going. Apple would have LOVED to sell more o
    • I wonder if I could make much profit scalping a couple.
    • Re:Boo Microsoft! (Score:5, Interesting)

      by omega9 (138280) on Thursday November 03, 2005 @09:26AM (#13940156) Homepage
      It's the media/customers that are kinda stupid for falling for these schemes...

      You can't blame the customer in situations like this. All they are are consumers who want a product. One metric of a good product is how well it initially sells, and all that's happening here is Microsoft falsifying that metric. It's just your every day corprate dishonesty. You could blame the media for not reporting on anything but the sellout, but it wouldn't suprise me if they just didn't bother digging any deeper to find that side of the story.
      • Re:Boo Microsoft! (Score:3, Interesting)

        by drsmithy (35869)
        One metric of a good product is how well it initially sells, and all that's happening here is Microsoft falsifying that metric.

        I dunno if I'd call that a very good metric. After all, how consumers know how good a product they've never used is ? I would have thought *long term* sales figures would be far more indicative of a "good product".

      • merely consumers? (Score:4, Insightful)

        by rajafarian (49150) * on Thursday November 03, 2005 @11:05AM (#13940789)
        You can't blame the customer in situations like this. All they are are consumers who want a product.

        You can't blame the profit-driven corporations, if people want to be sheep/consumers, if they want to be told what they need and what they want, and not act like the free-thinking, self-realized human beings that they have the potential of being, then f*** 'em, let them be treated that way. Round 'em up.
  • Nothing to see here move along.
    • I am not sure about this, the norway thing obviously looks incriminating but I think Microsoft is probably incapable of producing enough 360's to prevent a shortage. I don't know why but this console is hugely anticipated (I'm a pc gamer), the combination of early adopters and parents wanting to make sure that their kid gets what they want for christmas means that demand will inevitably outstrip supply. Most importantly MS wants to build up a massive lead before the PS3 lands, they want as many 360's in l
      • Yeah I was going to post something similar. People make it sound like MS has this scheme. They don't need a scheme, the shortage is a foregone conclusion. MS moved up the schedule a LOT in order to get the Xbox360 out this early. That's going to cause a lot of issues. THEN they are going to simultaniously launch in America,Europe, and Japan - three markets at once instead of a multi-tierd launch. Even if they actually made enough in time, the chances of them getting the distribution perfect is about n
  • by rednip (186217) * <rednip@noSpaM.gmail.com> on Thursday November 03, 2005 @09:10AM (#13940078) Journal
    Looks like it's not a rumour.
    Considering that the linked slashdot article was about a rumor, and the article uses lots of 'moles'. I offer continuing proof that any situation could be mocked with an well placed Simpson's quote...
    Homer:
    Get out. Who told you that?
    Bart:
    Nelson.
    Homer:
    Hmmm. That's the kind of dirt that belongs on my web page.
    Lisa:
    You can't post that on the Internet. You don't even know if it's true!
    Homer:
    Nelson has never steered me wrong, honey. Nelson is gold.
    Bart:
    You know, it might have been Jimbo.
    Homer:
    Beautiful, we have confirmation. [Lisa sighs in exasperation]
    So, they expect the system to sell out, like that never happens...
    • So Microsoft's CFO is a mole [reuters.com]?
      Microsoft's Chief Financial Officer Chris Liddell said there wouldn't be a big initial spike
    • Bingo! (Score:5, Insightful)

      by nobodyman (90587) on Thursday November 03, 2005 @10:14AM (#13940452) Homepage
      You've hit the nail on the head. It's as if Gizmodo haven't actually read the articles they're using as sources. Here's a perfect example:
      Reuters Article: New Xbox Set for Slow Start [reuters.com]. Summary: Microsoft acknowleges lower than anticipated sales, but ensures investors and retailers that they will be able to maintain predictable supply rates (unlike Sony, who had wildly unreliable supply rates for ps2).

      Gizmodo version: XBox 360 Tests it's brakes [gizmodo.com]. Summary: Micro$oft slowing production on purpose, yo! WTFLOL!!!??
      .

      There's no conspiracy here. Microsoft expects lower sales, and the PR machine is trying to explain why. Are they trying to spin the lower sales in the best way possible? Absolutely. Are the overzealous microsoft markedroids trying to turn the limited availability into positive thing? Of course. Are they deliberately driving down supply? No. The only news is that analysts and microsoft are restating sales estimates. Microsoft says that it's due to a late start in production (believable, given how late the new dev kits were). That might be the reason, or perhaps it's because the 1st gen content is lacking. However, it would be moronic to purposefully drive down supply in order to create "buzz".

      I know I'm required to hate Microsoft, but come on. As long as we're throwing out logic, why stop at "Microsoft Plans Deliberate Shortage" when you can have "J Allard Responsible for Lingbergh Baby Kidnapping"?
  • This is crap. They know demand will be high but they are restricting this anyway? Personally, I would be happy if stores would only let you reserve 1 360 per person to prevent the idiots buying 4 boxes and profit taking from desparate people on eBay. Granted, I don't feel for anyone trying to get this thing AT the launch day or soon thereafter. After Jan, they will be more available.
  • by Anonymous Coward on Thursday November 03, 2005 @09:12AM (#13940084)
    It's not exactly original or unheard of. Plenty of other companies have done this, including Slashdot's favorite company, Apple.

    I know slashdot and the nutjobs will make this out to be some part of evil conspiracy, but it's really just simple economics.

    If anybody rails on MS over this, you'd have to scream about every oother company that does this too. But they won't because Microsoft is the devil.
    • Indeed, I'm an Apple fanboy and I have to admit that Apple does this all the time. They're just not so blatant about it. Microsoft is new to this game, and their P.R. stinks, so they're not getting away with it as easy.

      But you're right -- it's just simple marketing. There's nothing particularly wrong with this -- if they produce fewer units then fewer units will be sold. It's a gamble they're taking in an attempt to generate demand. If it backfires, the only one who gets hurt is Microsoft, because they
      • Well, I have mixed feelings on this story. On one hand, yeah - we all know Slashdot is going to latch on tightly to any news item that puts Microsoft in a negative light, so it's immediately suspect.

        On the other hand, the part that bothers me is the accusation that MS is intentionally ordering stores to "sell out" on a pre-agreed date, or trying to ensure that the "sold out" notices are prominently displayed.

        There's a difference between announcing a new product and not really having much supply of it for a
    • "Microsoft is the devil"
      See, you just feel good saying that, don't you?
    • by EXTomar (78739) on Thursday November 03, 2005 @12:54PM (#13941920)
      "Never risk a sale today for a sale tomorrow." A salesman will always make a sale today. I wouldn't say a bad salesman is devoiding of speculating. Instead of being a salesman, they are acting as a broker which is riding the supply as a commidity market. As a broker they have different goals than a salesman mostly which servicing the consumer is secondary to making sure you maximize your distribution pool.

      In previous cases with Apple, Sony, Nintendo, etc is that they were honestly out of product and production couldn't ramp up immediately. UPS would show up with a delivery of 10 units which where automatically sold. 10 more units would not show up till next week. There were simply no more units to buy no matter how long you stood in front of the electronics store or how many times you clicked refresh on Apple.com. What the article is suggesting is that MS doing is putting an artifical ceiling on supply (otherwise known as rationing). Is it a good thing to put rationing on a non-essential item?

      I would perferably see a spike than to have MS trying to artifically monkey around with the market. In one case the worst they are accused is that they misjudged demand (hey it happens). In the other case there is something more meleviant is going on. I think that if they artificially hold back warehouses full of product they are looney. Make a sale today you have cash they can use now to reinvest. What would they possibly reinvest in you ask? Something wacky like increase production? If you bank on a sale tomorrow you might have twice as much cash...or they might go off and buy something else.
  • Oh no! (Score:5, Insightful)

    by w.p.richardson (218394) on Thursday November 03, 2005 @09:13AM (#13940088) Homepage
    It's not like you could ever not buy into the hype and let the things rot on the shelf by not going out to buy them on day one!
  • Don't own an Xbox (Score:3, Interesting)

    by fprintf (82740) on Thursday November 03, 2005 @09:17AM (#13940105) Journal
    I don't own an Xbox but I am super pleased that they are coming out with the new version because it then means that the regular Xbox games and console will be coming way down in price. That means I'll be able to finally afford a console that plays games pretty darn well... probably under the current $150 going price for a new unit, and games will be relatively cheap either new or used.

    Of course, I have missed out on a couple of years of playing the console but it'll still be fun for me. After all, Halo is brand new to me and I'll get the same enjoyment and playability out of it that you all did a while back.

    p.s. I am the guy that buys all the games in the $5 and $10 bin, including the triple packs you can sometimes buy at Marshalls and TJMaxx. :-)
    • Plenty, if you're into retro games. I bought Tekken 3 for a fin and a PS1 memory card for $2. I also bought Street Fighter Alpha, Grand Turismo 2 and I think even the PSX re-release of FF I&II for the same price.

      Video games haven't made huge leaps in graphics and frame rates since the induction of the 32 bit era, and it's arguable whether these next gen games are any more entertaining either. Point is, the deals are out there if you can lower your standards a notch.

       
    • p.s. I am the guy that buys all the games in the $5 and $10 bin, including the triple packs you can sometimes buy at Marshalls and TJMaxx. :-)
      Oh, so YOU'RE the guy who keeps those crappy software companies in business. You know, I've always wanted to do charity work.
  • by Headcase88 (828620) on Thursday November 03, 2005 @09:20AM (#13940117) Journal
    "Hey remember back when the PS2 came out? They tried to sell it earler than the competition, so they released a sub-par console quickly rather than wait, and didn't have nearly enough consoles to cover demand."

    "Yeah, and they're the leaders of this generation..."

    "Exactly, so you know what we have to do to beat Sony... release it even earlier, even buggier, and in even shorter supply!"

    "Yeah, in fact, let's make the supply so damn low that it will sell out even if it fails sales targets! Then people will be impressed and buy the console once it gets back in supply."

    "But how about the people who get one at launch? When they pay so much for a buggy system because of its short supply and there's barely any good games for it, won't they get pissed?"

    "Yeah, but what are they gonna do? They already bought the console. And they'll completely forget about it once the good games come out (around the PS3/Revo launch)."

    "Sounds good to me."
  • Time for auctions (Score:5, Interesting)

    by G4from128k (686170) on Thursday November 03, 2005 @09:23AM (#13940136)
    I'm wondering when some company will just auction "hot" new products to the highest bidder? The top 1000 bids get the product in week 1, the second highest 1000 bids get the product in week 2, etc. A central website would manage the bidding and winners would get a code or printed barcode sheet that entitles them to buy the item at the agreed price at their local retailer or online. Retailers could even use bid data to guess-timate the likely volume of sales (knowing that some % of winning bidders in their zip code are likely to buy at that retailer).

    Auctions would reduce problems with insiders who buy multiple copies of the product at retail and sell scarce goods on eBay. It would also avoid mob scenes in which desperate parents storm the doors of stores known to have the much-sought product. Finally, winning bidders would have some assurance that they will be able to get the scarce item.

    • by miller60 (554835) on Thursday November 03, 2005 @11:23AM (#13940968) Homepage
      Once the retail outlets run out of a console or handheld, they start selling at premium prices on eBay. Last Christmas the Nintendo DS was selling on eBay for about $30-$40 above retail. There was plenty of supply, too. retailers didn't have it, but eBay did. Genuine shortage or market manipulation? Hmmmm ...

      Therein lies the challenge for a manufacturer auction, as their motives and marketing practices would be suspect (hence the parent post).

  • by jkind (922585) on Thursday November 03, 2005 @09:24AM (#13940139) Homepage
    Pretty cool interview with mechanical engineeer for the 360.. You can almost sense his disgust when talking about the environmental standards the new system has to live up to:
    http://www.xbox.com/en-US/hardware/xbox360/xbox360 theguts.htm [xbox.com]
    • Almost funny to hear them explain how they are using more than one supplier/manufacturer in order to increase competition and lower the prices for the end user.
    • by Bert64 (520050) <bert AT slashdot DOT firenzee DOT com> on Thursday November 03, 2005 @09:37AM (#13940233) Homepage
      I like the comment from the microsoft engineer:

      > If you only have one supplier, you have less price negotiation leverage.
      > Multiple suppliers keep the prices competitive. The other thing is that
      > this time we own the IP on the chips. So we can make them at our own foundries.

      So it`s good for microsoft to have multiple suppliers so it keeps the prices they pay competitive, but they build their own products to make it as difficult as possible for other suppliers.
      They are openly benefitting from a competitive marketplace while trying their hardest to take these benefits away from their customers.
      • Yes. They are also probably trying to maximize the amount of money they receive despite minimizing the amount of money they spend. Individual workers may also be trying to increase the amount of money they get from Microsoft, despite trying to minimize the amount of money they spend on products and services in their own lives. And it's been rumored that when Bill Gates invests in stocks, he tries to buy low, despite trying to sell high. Up is truly down in the Microsoft world.

        Manufacturers try to get in
      • by utexaspunk (527541) on Thursday November 03, 2005 @10:43AM (#13940637)
        I think you misunderstood what he is saying- The idea is that they try and build the system out of as many interchangeable off-the-shelf components as possible so that they can benefit from competition and economies of scale, and that they try to own the IP/means of production on whatever parts can't be interchangeable so that they aren't beholden to any one supplier.

        This is sorta the opposite case of Apple's move to x86- having only one major producer of PowerPC chips made Apple dependent upon IBM's capacity to produce the chips in the quantities they need at a good price. Moving to x86 allows them to not only benefit from the Intel's massive production capabilities, but also the fact that there is competition in the market for chips that can handle the x86 instruction set, which drives down prices, and having the possibility of switching to AMD or another producer keeps their options open should Intel try to mess with them.

        It's just good business. Funny how when MS does it, they get bashed... Yo, don't hate the playa, hate the game, dawg :)
        • I`m not bashing their move to have multiple competitive prices, that very much makes sense..
          What i`m bashing is MS`s constant moves to lock competition out of markets where they`re strong, their use of proprietary APIs and file formats to prevent competition entering markets where they`re dominant.
          If your a microsoft customer, your in exactly the same situation apple was.. For whatever products you buy from microsoft (office, windows etc) your are totally dependant on them. There is no other competitor that
        • WHOOOOSH!

          That was the sound of the previous post's point zipping right over your head.

          The original poster did not argue that multiple suppliers for every possible component is a good thing or that MS or anyone else should not do it. Obviously it is advantageous to any business to have multiple suppliers for everything they need and to use parts built to standards to ensure that they are getting the same thing from any given vendor. The advantages to price, availability, and future planning is enormous.

          W

    • This little tidbit is my favorite in that article:


      "Xbox.com: Tell me another cool thing about the guts.

      JR: Well, we want to discourage hackers, so this time around we didn't put any screws on the outside of the box and have multiple tamper evident labels. So with Xbox 360 we'll be able to tell if they've cracked the case.

      Xbox.com: And of course, just like the original Xbox, cracking the case immediately voids your warranty.

      JR: Of course."
    • by EpsCylonB (307640) <eps@NOspaM.epscylonb.com> on Thursday November 03, 2005 @09:56AM (#13940350) Homepage
      Good read, I liked this part...

      Xbox.com: Tell me another cool thing about the guts.

      JR: Well, we want to discourage hackers, so this time around we didn't put any screws on the outside of the box and have multiple tamper evident labels. So with Xbox 360 we'll be able to tell if they've cracked the case.


      Sounds like a challenge !
      • This was my favorite bit:

        Jeff Reents: It's tougher than the original Xbox® for three reasons. First, we had to pack twice the power of the Xbox into a smaller form factor. Second, it needed to meet much tougher environmental standards. And finally, we needed to be more cost effective.

        Xbox.com: Let's talk about the power challenge first. Is Xbox 360 really twice as powerful as Xbox? JR: Yes. Xbox had less than 100 watts of power; Xbox 360 has over 200 watts.

        Oooo! 200 watt gamestation! Twice as "powerful
      • HATE (Score:5, Insightful)

        by freeweed (309734) on Thursday November 03, 2005 @11:13AM (#13940859)
        Man, I hate when game companies do this.

        Many older consoles (Nintendo, I'm looking at you) use tamper-proof screws for this supposed reason. Of course, any half-serious "hacker" will find a way in, usually because these screws aren't that hard to find bits for, thanks to the Internet. A lot of the original reasoning, which I can sort of understand), was to keep casual users from opening them up and messing with them.

        Unfortunately, as our Zelda cartridges age, the built-in batteries (CR2032, for anyone who cares - one of the most common "watch" batteries out there) are mostly all dead. In order to use these games anymore, you have to open them up and replace the battery.

        Tamper-proof screws make this VERY difficult.

        Put labels all you want, if it's warranty you're worried about. But please, understand that these things do need repair from time to time, especially after they're out of their expected lifetime. ESPECIALLY with moving parts inside (Sony, I'm looking at you!). There's nothing worse than having to wreck the casing just to get in and fix a few loose wires :(
        • Re:HATE (Score:3, Insightful)

          by Pakaran2 (138209)
          And you can bet that in 2-3 years, they'll sell a service where you can mail it in and they'll replace the battery for $50. There's already something like that for the iPod.
    • You can almost sense his disgust when talking about the environmental standards the new system has to live up to:

      Really? I didn't get that at all. I thought he sounded proud of its environmental credentials.
    • From that article: "Xbox.com: Let's talk about the power challenge first. Is Xbox 360 really twice as powerful as Xbox? JR: Yes. Xbox had less than 100 watts of power; Xbox 360 has over 200 watts."

      Ow! I feel like someone just sucker punched me in the marketing center of the brain. It's twice as powerful because it consumes twice the power...
    • Summary of RoHS legislation from Farnell. [farnell.com]

      Basically, most electronic products shipped to Europe and operating under 1000V (military and medical products except for now) must not contain 6 restricted substances. One of the biggest is lead. There is a large push in many electronic industries to convert their electronic products to RoHS compliant products. It's a lot of work.

      Sony and Nintendo have to do this too if they want to sell their units to Europe. From a general industry trend, Japan tends to be ahe
  • so what? (Score:3, Insightful)

    by tomstdenis (446163) <tomstdenis@@@gmail...com> on Thursday November 03, 2005 @09:25AM (#13940146) Homepage
    Who cares?

    It isn't as if Sony and Nintendo don't do the same.

    That and I'd wait for a while before buying it anyways. Let them work out the rev.1 bugs :-) like fire hazardous power cables and the like. Being an early adopter just qualifies you for "sheep" status.

    That and who cares? If your friend gets one instead of you it means you can spend more time out of your house. It's all good.

    Tom
  • Can you say... (Score:2, Interesting)

    by gwayne (306174)
    federal price-fixing indictment?
  • by tkrotchko (124118) * on Thursday November 03, 2005 @09:26AM (#13940153) Homepage
    Remember the PSP launch? Remember how there was ridiculous prices on ebay and for presell? Do you remember what happened launch day? The local walmart sold hardly any and had a lot left over. It makes you wonder if these companies systematically engage in PR that gives the appearance of big demand to stimulate buzz.

    The Xbox360 is the same way; it looks to me that at launch there are no games worth buying combined with a high price and an admission that later consoles will be better because they'll have an HD-DVD built-in and you get the impression that this will lay a big egg on launch.

    Really, is anybody chomping at the bit to get one of these *now*? Maybe in about 6-12 months, but there's nothing compelling about this right now.
    • Really, is anybody chomping at the bit to get one of these *now*? Maybe in about 6-12 months, but there's nothing compelling about this right now.

      I think there is a reason they are launching in November.
    • by ivan256 (17499) *
      Really, is anybody chomping at the bit to get one of these *now*?

      Of all my friends and co-workers (100+ people, probably 80% gamers, more than half have Xbox) I know *one* person with a pre-order.

      That's my bit of anecdotal evidence. To be fair, I don't know many people in the 16-19 year old age range anymore...
    • PGR3 and Perfect Dark: Zero look pretty good.

      Did anybody know that Halo would be so frickin awesome when the xbox launched? There may be a dark horse in the launch line-up.

      I think people with HD TVs will be the first people to buy this system. We HDers have been wanting HD games for a very long time. So far, the xbox has been the only system to provide them (very few though).

      If I had the money, and wasn't in my last year of school, I'd line up to buy it.
  • Duh!!! (Score:5, Insightful)

    by Anita Coney (648748) on Thursday November 03, 2005 @09:27AM (#13940162) Homepage
    This has been going on for DECADES!!! Does anyone remember the Furby?! No, but due to its "shortages" it was the hottest toy of the year. The same was true of the Tickle-me-Elmo. Pet Rocks. Beenie-Babies. It's well known in marketing that the appearance of scarcity increases demand.

    Heck, look outside all the hot clubs. The mere fact there's a line makes people think it's the cool place to be. People are sheep. Get used to it!
    • Re:Duh!!! (Score:5, Insightful)

      by splatter (39844) on Thursday November 03, 2005 @09:51AM (#13940314)
      Don't forget Disney. Why do you think they only sell movies for a limited time, then shelve them for years at a time with out releasing any more copys to the public?

      Because they understand that by creating shortage they can dictate the pace and to some extent increase demand for the product.

      This is all Mgt 101 people, not some grand plot to take over the world.
    • Re:Duh!!! (Score:5, Funny)

      by HD Webdev (247266) on Thursday November 03, 2005 @10:10AM (#13940422) Homepage Journal
      The same was true of the Tickle-me-Elmo. Pet Rocks. Beenie-Babies. It's well known in marketing that the appearance of scarcity increases demand.

      Yes, convincing the public that there was a shortage of rocks was quite a feat.
  • by jurt1235 (834677) on Thursday November 03, 2005 @09:28AM (#13940165) Homepage
    for Microsoft if after this kind of rumors, it does not sell out at all. And to do this thing around Christmas is really not a good idea anyway. People are not going to wait till the end of januari before they can buy a Christmas present for their kids. They will buy another console, or they will wait for the next birthday/vacation.
  • by Ezmate (641054) on Thursday November 03, 2005 @09:28AM (#13940169)
    FTFA:

    Xbox 360 won't face the same spike-then-slump phenomenon that plauged Sony's PS2 launch. The idea seems to be that would-be Xbox 360 buyers will be less unhappy with a steady but limited supply of consoles than a massive sell-off followed buy a drought.


    So, the slashdot summary seems to imply that this is simply an evil marketing ploy by Microsoft. Instead, I see it as a way of keeping the new Xbox in a position where consumers don't forget about it.

    If the new Xbox sold out the first day (or two) & there weren't any more units for another month (like the PS2), how many consumers are going to forget about it? How much marketing momentum do you lose when everyone has to wait a month before they can hope to get the "next big thing"?

    If, on the other hand, it sells out on the first day, but customers are told that there will be another shipment in 3-4 days, they'll be a lot less likely to forget about it. Not only that, but when when they do get one, they will still have the excitement of being an early adopter - and I'm sure that will translate to more accessories being sold.

    If I were a Microsoft shareholder, I'd be happy with this rollout...
    • by ivan256 (17499) * on Thursday November 03, 2005 @10:12AM (#13940435)
      sold out the first day (or two) & there weren't any more units for another month (like the PS2)

      Except that's not what happened with the PS2. The PS2 had a largish initial supply that sold out in pre-orders, then a steady trickle of consoles about the size (if not larger) than what Microsoft is planning. The K-B Toys in my local mall, for example, had over 60 they sold as pre-orders, and then had about 10 a day from then on. Those additional 10 all sold out within an hour of when UPS arrived every day. There was no period where there were no units for a month.
    • There's a few other posts where people have made good arguments from the supplier management perspective, but from the marketing perspective.....well, lets just say that consumers don't like fake buzz. I REALLY hope that every single news organization that mentions MS selling out on day one will also mention in the same article that this is due to intentionally limiting the number available in order to generate a lot of fake buzz.

      Not all press is good press, and I think that if people are going to hear abo

  • It makes sense. (Score:3, Insightful)

    by dreemernj (859414) on Thursday November 03, 2005 @09:29AM (#13940173) Homepage Journal
    The money is not going to be made by the console, it'll be made by the games, so rather than go for maximum console sales, put the limitation in place to generate hype and now the console is part of the advertising scheme and ends up being a better value for MS.

    And anyway, who cares? If you understand this is a ploy it will not really affect you (unless you really really really wanted a 360 on day one). But, I doubt they would do it without having reason to believe it would boost the console's appeal to some people. People that might not have realized tactics like this are used regularly. And those people need to read some books, like "How to Lie With Statistics," to gain some perspective on advertising in genenral.
  • by AgentUSA (251620) on Thursday November 03, 2005 @09:30AM (#13940175) Homepage
    Hey, everybody! Check out the all new Cartmanland! It's our Graaand Opening! Cartmanland has over a hundred fabulous rides , six roller coasters , and tons of great surprises! And the best part is: You can't come!! That's right, because at Cartmanland, only I, Eric Cartman, can get in! That means only I can ride the all-new Tornado Twister, a roller coaster that splashes in the water! Wow! It's the greatest amusement park in the Colorado area! And nobody can go!! Especially Stan and Kyle!! HAHA!! So come on down to Cartmanland now! But don't plan on getting past the parking lot, 'cause remember:

    So much to do at Cartmanland, but you can't come! Especially you, Stan and Kyle.
  • by TrappedByMyself (861094) on Thursday November 03, 2005 @09:31AM (#13940180)
    I spent 3 seconds on the arstechnica article posted and see that Microsoft has two options
    1) Ship a boatload at once, then have a period where none are available
    2) Stream out the shipments so that a constant, but limited supply are available

    They saw from the PS2 launch, that the public reaction to option 1 wasn't very good.
    So....they choose option 2.
    It's a business choice made when weighing manufacturing constraints vs customer reactions.

    Of course Slashdot wants to hype this up as yet another reason why Microsoft is evil, and people are biting.
    Tell me, which organization here is the one playing psych games with their customers?
    • I read TFA, and it sounds more stupid than evil.

      "They want to have more of a constant supply," said Matt Rosoff, analyst at Directions on Microsoft, an independent research firm.

      "They don't want a huge spike in December and then a slump in January and February," Rosoff said, "They're trying to avoid that."

      So that whole... christmas sales things... that's not important? Are they literally saying that they're going to stockpile units during christmas, in hopes that more people will buy them after c

  • Instinct (Score:2, Interesting)

    by distantbody (852269)
    It is a basic human instinct to aggresively persue what is in short supply (i.e. want what you can have, a.k.a. : "wow, its sold out, it must be really good")

    I am perfecting the fine art of stating the obvious.
  • Interesting Tactics (Score:5, Interesting)

    by TyrionEagle (458561) on Thursday November 03, 2005 @09:32AM (#13940185) Homepage
    This is actually quite a good idea from Microsoft.

    Hold on, let me explain, put the pitchfork down.

    Most consoles have huge date one allocations and sell out. There is then a huge gap while the manufacturer re-supplies, eventually things settle down to normal sales figures and supply can match demand.

    If MS limit the number of sales on day one, they can keep units flowing into stores instead of having a slump. You'll keep people coming back and retailers won't have dry periods when they've sold out and are waiting for more stock.

    It's a crazy plan, but it might just work.
  • I've figured out Microsoft's hidden motto: "Try not to give the customer what they want."

    If they just spread rumors and hyped media bullshit, I wouldn't be terribly surprised, but knowingly limiting the number of consoles available? Maybe they're banking that what happened with the PS2 will happen with them, but they seem to miss a lot of why the PS2 is as it is now.

    To ensure an immediate "sellout" of the Xbox 360 on launch day

    That could be one way to look at it. Another is that even Microsoft doesn't think
  • Deal With It! (Score:5, Interesting)

    by pandrijeczko (588093) on Thursday November 03, 2005 @09:36AM (#13940225)
    So Microsoft want to get as much publicity as they can for the X-Box 360 launch day - big deal...

    Why is this any different to Apple's launch of the iPod, Sony's launch of the PS2 or Nintendo's launch of the Gameboy Advance? All of these "sold out" on the day of their launches.

    I have no love for Microsoft whatsoever but they're just a big corporation marketing a product that they just want to sell lots of.

    And if they leech money from the countless sheeple who just *have* to have something before anyone else in their street, then I say good luck to them!

    • Re:Deal With It! (Score:4, Informative)

      by Yahweh Doesn't Exist (906833) on Thursday November 03, 2005 @09:58AM (#13940362)
      the difference with the iPod is there is no artificial low supply. the day the iPod is announced you can order one at the online store and you know that within a couple of weeks you'll have one. they ship as quickly as they're made. there's no talk about "selling out" - in Steve's talks it's all about the number actually shipped.

      here with the x-box it's a case of "omg get to teh store the first second it opens or you'll nevar evar get teh one!!!!11 evar!!!1". they don't care how many are sold just how quickly the first batch are sold.
    • So Microsoft want to get as much publicity as they can for the X-Box 360 launch day - big deal...

      Why is this any different to Apple's launch of the iPod, Sony's launch of the PS2 or Nintendo's launch of the Gameboy Advance? All of these "sold out" on the day of their launches.

      I have no love for Microsoft whatsoever but they're just a big corporation marketing a product that they just want to sell lots of.

      And if they leech money from the countless sheeple who just *have* to have something before anyone else
  • Someone tell me why a post about the article being a dupe got modded to 5-Informative? It says nothing about the article, dupe or not, nothing about the topic, and yet its still modded up to the maximum. It should be 'offtopic' since it has nothing to do with the content of the article.

    For me this wasn't a dupe since I hadn't read it already, yet the first comment I see is some offtopic crap about a duplicate post. What? You mean the /. folks are human? OMGWTF, call the police.

    Note this is also offtopic, bu
  • 1. Get in line to the store, first.
    2. When the date comes, buy ALL of the supply. Just come to the counter and say "I want to buy XBOX 360. All of them."
    3. Get outside, and sell them all to the crowd waiting, for $499 a piece.
    4. If you have any left, sell on EBay.
    5. Profit!!!

    For better effect arrange the action in cooperation with a bigger team, so you would dry up whole city or a state, and you won't compete with each other in terms of price.

    Shortage in supply and excess in demand naturally leads to increa
  • What would be really funny, is if they still don't run out. I know it's a little far fetched, as most people would buy into the marketing, but it would be interesting to see microsofts reaction. Besides, who has that much money to spend on a new system anyway. let's see $300 for the system that actually has everything, plus $60 for another controller, plus $20 (X2) for those battery packs so you don't run out of power in the middle of the game, plus $60 per game, maybe you should buy 2 or 3. Now you're
  • Heh. This reminds me of the opening scene in Max Barry's novel, Jennifer Government [maxbarry.com]. In it, some (fictional) Nike executives get together and decide that they're going to:

    a) restrict supply of their new super-super-hot Nike Mercury shoes to a trickle, so the kids go *nuts* for them, then:

    b) unload a few hundred thousand on the market at a hugely inflated price, and THEN:

    c) since Nike knows they'll lose that "can't-find-'em-anywhere, selling-like-hotcakes" prestige once people realize they can get Me

  • Could someone who is familiar with the FTC please enlighten us here in the USA if this "planned shortage" is even legal here?
    Can they just do that? Help us out here.
  • by smitty_one_each (243267) * on Thursday November 03, 2005 @10:28AM (#13940528) Homepage Journal
    are going to provide a free copy of Dianetics, to go with the new XBox. Why get one bestseller when you can get two?
  • Ebaying a console! (Score:3, Informative)

    by ajservo (708572) on Thursday November 03, 2005 @10:50AM (#13940693)
    Good luck with that all you potential vultures!

    I saw through this last year with the DS and the PSP.

    1 of 2 things will occur, neither good for you.

    1. There will be too many consoles and the extra console will sell off at or below cost.

    2. There will be SO many other people doing what you're doing that you won't be able to stickout from the crowd, and any potential profits to be made on the sale will get eaten from competition.

    The idiots who start auctions out on items at 200% or higher of retail cost are the ones who'll learn the lesson hardest.

    Good luck!
  • Hype, fools, money (Score:3, Insightful)

    by DrXym (126579) on Thursday November 03, 2005 @11:12AM (#13940846)
    Who on earth is stupid enought to buy anything on its first day of release? Whether MS deluge the market or artificially restrict the flow, the simple fact is that the prices will be sky high in the first few weeks and probably until Christmas. That and owners will be able to choose from miniscule selection of games which seems to be shrinking ever further with announced delays from one maker after another. If early adopters are really lucky, they'll get a system which is broken or flawed in some way just like the dead pixel issue with the PSP, or the scratchy screens of the iPod Nano.

    Every hyped gadget release is like this. Why do people buy into the hype? It's better to wait and gauge the reaction, especially after the hysteria has died down and been replaced by more level headed reviews and the number of game titles has increased.

  • Brilliant! (Score:3, Interesting)

    by tbone1 (309237) on Thursday November 03, 2005 @12:58PM (#13941955) Homepage
    Create an obvious shortage to gouge the consumer? Brilliant! Afterall, it's working so well in the oil industry, and their customers are so happy that they're not seeking alternatives!

    (For those who couldn't catch a clue with a mitt, this is sarcasm.) (And yes, I do need to include this disclaimer.)

  • Sony or Nintendo could shut down XBox 360 with a one page ad in a gaming mag like EGM and then do another spot in New York Times. The ad would just have to say:

    1 million units made, less then 100,000 unit sold. Do the math.
  • Nothing new. (Score:3, Insightful)

    by kuzb (724081) on Thursday November 03, 2005 @06:42PM (#13945679)
    Yeah, like this tactic is anything new. Sony does exactly the same thing. With the PSP, they only released so many units, and of those units, a larger number were given to companies which followed sony's advertising guidelines more carefully. This is a common tactic, and shouldn't be seen as only something Microsoft would do.

The flow chart is a most thoroughly oversold piece of program documentation. -- Frederick Brooks, "The Mythical Man Month"

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