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XBox (Games)

Getting All 1,700 Parts of the Xbox 360 to Market 206

Posted by Zonk from the complicated-process dept.
Carl Bialik from the WSJ writes "Microsoft is hoping its Xbox 360 will further the company's goal to 'link the Web and entertainment of all forms in consumers' living rooms,' the Wall Street Journal reports, but 'one manufacturing misstep -- a shortage of graphics chips or a recalled hard drive -- could derail those ambitions and drag Microsoft's unprofitable videogame business even deeper into the red.' The WSJ traces the 1,700 parts that go into the device through the supply chain -- from two southern China factories, Rotterdam, and on to Toledo, Memphis, and ultimately, retailers in the U.S. -- and looks at what could go wrong along the way."
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Getting All 1,700 Parts of the Xbox 360 to Market More

Getting All 1,700 Parts of the Xbox 360 to Market

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  • Getting All 2*2*5*5*17 Parts of the Xbox 2*2*2*3*3*5 to Market
  • Doesn't Microsoft lose money on every X-box sold in the first place?
    • Probably, but they more than make it up with game licensing/royalties. Just like inkjet printers...cheap as hell, but ink is worth gold to sellers.

      • Re:Speaking of bieng in the red... (Score:5, Informative)

        by kilrogg ( 119108 ) on Saturday November 19, 2005 @02:57PM (#14071780) Homepage
        Actually they don't fully make up for all the costs, as TFA points out they've lost 4 billion dollars so far.
        • I just don't see how they can keep out of the red, when they're paying off slashdot editors to post every trivially relevant XBOX 360 article. Come on we're getting about 2 crapping XBOX 360 stories a day. The 360 is not revolutionary, it's hardly evolutionary. Higher poly count, higher resolution woooooo. Nothing new, nothing particularly interesting. Who the hell really cares anymore?
          • I just don't see how they can keep out of the red, when they're paying off slashdot editors to post every trivially relevant XBOX 360 article.

            But what's a couple bags of cheetos and some burned CDs of fake Natalie Portman nudes really cost? No, the Slashdot editors could be bought off for less than the weekly budget of snacks of one wing of one floor at Redmond.
            I think the budget goes to replace broken office chairs.

            =tkk
          • Have you seen the number of comments that each 360 story gets?

            Typical 'games' stories on Slashdot get about 35 comments while they are still up on the menu. Xbox 360 stories are getting hundreds.

            So, if I am an editor, I would realize that people are interested in this. And as long as the comments keep coming, I would keep posting the stories.

            Obviously though, comments like yours just add to the frenzy. So by complaining about the stories, you are just ensuring that we get more.

            I, and all of the other Xbo
      • That's the theory these consoles are made by, but the Xbox apparently runs at a loss (well, look at the Microsoft accounts, the Xbox division's deep in the red), as the subsidy is just too large, due to factors like the retail cost having to be dropped to compete with the PS2, but the actual hardware cost hasn't dropped as radically, due to their use of "off the shelf" components, as well as some stuff with what are basically fixed costs like the hard drive.

        Of course the Xbox 360 seems to be designed so it
        • I wonder about their business strategy, personally: "link the Web and entertainment of all forms in consumers' living rooms". Obviously, the internet holds a lot of potential- online gaming, downloading movies and TV schedules, etc. But do people really want to surf the web, listen to music, watch movies and play games, all through one machine and one interface? It's an interesting idea, but in practice I think you end up with the old "jack of all trades, master of none" problem.

          That, and less is often more

    • Yeah, but they make up for it in game sales. Well that is assuming all xbox owners bought multiple copies of Halo and Halo 2, seeing as how that is their only really popular franchise.
    • Doesn't Microsoft lose money on every X-box sold in the first place?

      More accuratly, Microsoft loses money on every machine made. More if the machien is unsold.
    • This has been the claim of every manufacturer since the Nintendo. I'm not buying it. We all know that it is common practice for companies to do 'creative accounting'. We know that there are plenty of ways to make it look like money is being lost when it is not in reality. What do you think would happen if MS admitted to making a 10% profit on their hardware? That's right, they would have hundreds of thousands of people screaming that they should lower the price, or stop charging for a "license" to make
      • This has been the claim of every manufacturer since the Nintendo. I'm not buying it. We all know that it is common practice for companies to do 'creative accounting'. We know that there are plenty of ways to make it look like money is being lost when it is not in reality. What do you think would happen if MS admitted to making a 10% profit on their hardware? That's right, they would have hundreds of thousands of people screaming that they should lower the price, or stop charging for a "license" to make soft
  • Granted I havn't read TFA, but how is this any different from any other relatively complex peice of hardware? And why would it fsck up MS?
    • This is not a challenge unique to Microsoft, of course.

      Any hardware manufacturer has to properly plan lead times and coordinate parts supplies. At the same time, parts obsolescence is a big challenge to any manufacturer. Every one of those thousands of parts needs to be tracked and if obsolescence is pending, a suitable replacement needs to be identified and validated.

      So the article simply points out the obvious: the more complex a piece of hardware, the more can go wrong with the supply line.
      --
      http:/ [gloryhoundz.com]
      • Actually, the article does make a case for added drama in the XBox 360 launch:
        1. the initial launch is extremely important to a hype driven product like a console
        2. Micrsoft isn't a hardware company so this isn't their specialty
        3. Microsoft is behind Sony and has lost $4BN on the XBox
        4. Microsoft is experimenting with more custom parts compared to XBox1 - good idea or bad?

        I also thought it interesting that every XBox is tested for 2 hours. That's not true for typical computers, washing machines, even cars AFAIK

  • Soundcard recall first, please. (Score:3, Informative)

    by koonat ( 914245 ) on Saturday November 19, 2005 @02:41PM (#14071682)
    Really, so if some hardware in the nex Xbox breaks or is recalled it will derail microsoft - would most other companies not be affected? What the?

    I was recently in an IRC channel with basehead (who is an old tracking god, and now works for a video game company and is currently working on one of the 360 launch titles) who said:
    The XBox360 does not have any standard stereo output. It either uses the Dolby digital, or it downsamples 5 channels together as 'mono'.

    So anyone without a Dolby sound system is going to hear complete crap. Maybe this will change, but it will be launched this way. This sounds to me about as bad as a soundcard recall.
    • I can't speak to the xbox in particular, but it's probably worth pointing out that part of the dolby digital spec deals specifically with downmixing (not to be confused with downsampling, an example of which would be converting 48khz audio to 44.1khz audio) to stereo. What this means, is that if the xbox is outputting dolby digital encoded audio, it will output it in 5.1 if you have a 5.1 speaker system attached, or it will output in stereo if you have just the two speakers attached. This is all done auto
    • Component availability is as ubiquitous to a major product provider as UPS'es are to Sys Admins. There is _zero_ possiblity that "oops, a critical component didn't come through" would happen in a production environment.

      This is clearly marketing hype and a way to artificially create demand even when there is plenty of supply.

      They didn't have a supply shortage for any other of their boxes (that I know of), and if they did it was completely strategic.

      The only time a company will intentionally limit supply (or

  • "XBOX 360 DELAYED BY SHORTAGE (Score:5, Funny)

    by Anonymous Coward on Saturday November 19, 2005 @02:43PM (#14071700)
    OF #12 TORX SCREWS" sources at Micrsoft reveal...

  • This is a first for the industry! (Score:5, Funny)

    by Anonymous Coward on Saturday November 19, 2005 @02:44PM (#14071707)
    Most things are only made of one or two parts with a very simple supply chain. In fact, the computer industry's previous champion of complexity was the Apple Macintosh which consisted of only two parts: 1 mouse button, and 1 everything else.

  • Competition is Good (Score:5, Insightful)

    by mordors9 ( 665662 ) on Saturday November 19, 2005 @02:45PM (#14071710)
    Actually this is an area that I hope M$ does well, for the same reason that I dislike their behavior in the OS market. If the Xbox does well and puts some pressure on Sony then hopefully features will be improved and prices driven down for both competitors.

    • Re:Competition is Good (Score:5, Insightful)

      by Y-Crate ( 540566 ) on Saturday November 19, 2005 @03:04PM (#14071819)
      Actually this is an area that I hope M$ does well, for the same reason that I dislike their behavior in the OS market. If the Xbox does well and puts some pressure on Sony then hopefully features will be improved and prices driven down for both competitors.
      Exactly.

      Microsoft has traction in the console market, but not absolute dominance. Sony and Nintendo were caught off-guard by their strong second place showing in the last generation and have been driven that much harder to make things better ever since.

      Personally, I'd love it if Microsoft outsells Sony this time 'round (not happening), and Nintendo outsells them all the generation after that. I want them all to stay on their toes and avoid the complacency that was settling into the market at the dawn of the last generation before Microsoft was actually seen as a viable competitor.

      Nintendo and Sony were really beginning to rest on their laurels and that has come to an end.

      The 360 hardware aside, the PS2 and to a much lesser extent the Gamecube are beginning to show their age. The GC has been spared the ravages of time a bit because of Nintendo's disinterest in pushing the graphic envelope (they have their reasons, and I respect that. I'm not looking for a flamefest on that issue) but the PS2 has really been forced to hang on a bit too long.
      • The 360 hardware aside, the PS2 and to a much lesser extent the Gamecube are beginning to show their age. The GC has been spared the ravages of time a bit because of Nintendo's disinterest in pushing the graphic envelope (they have their reasons, and I respect that. I'm not looking for a flamefest on that issue) but the PS2 has really been forced to hang on a bit too long.

        The PS2 I agree, it's old and looks terrible on a big screen TV. But the GC came out roughly the same times as the original Xbox. IT grap
      • Nintendo and Sony were really beginning to rest on their laurels and that has come to an end.

        I'm not seeing this. As a developer, Sony put a lot of resources into experimental titles... a strategy that paid off for them. They've also pushed into the realm of network adaptors, Hard disk drives, and other areas they felt they needed to compete in. They poured a lot of resources into the PSP. Sony was by no means resting on their laurels.

        Nintendo either. They knew they had a huge challenge ahead of them a

        • They've also pushed into the realm of network adaptors, Hard disk drives, and other areas they felt they needed to compete in. They poured a lot of resources into the PSP. Sony was by no means resting on their laurels.

          Yes, long after the XBox went with network connectivity and a hard drives. That's resting on your laurels. And their online strategy was (and is), well, not guaranteed to succeed, to put it nicely.

          Nintendo was more hampered by developer relations than any resting. Although they certainly got a

          • ...except for the controller. (Which, uh, is "not so good" (tm) )

            I still don't understand why most don't like the cube's controller. When I first saw it I thought it was an absolute nightmare, but if you actually *use* the thing it's far superior than the XBox or PS2 controllers.

            Most importantly, all the buttons on the cube controller have a distinctive shape. I can't tell you how many times I've had to stop in mid-game on the other consoles to figure out which is the "XO Tr


            • I still don't understand why most don't like the cube's controller.

              1. The shoulder trigger moves too far. Way to slow to fully depress.
              2. The Z button is hard to reach when you're on the shoulder button
              3. The final click required too much pressure, especially on shoulder buttons
              4. The placement is different from any other controller

              It was a nice try, but it didn't work out. Blame it partially on the game companies for not using it properly, since they had to port to the other platforms t

      • You must not own a PS2.

        The newer games are being released with incredible graphics on the PS2 that are almost comparable to an XBox. Considering the PS2's older hardware design and lower cost of manufacturing, its holding on well -- which is quite insulting to the XBox.

        Sure, the XBox is a bit better, but its a lot more expensive (to build) and not that much better, honest.

        Go play God of War on the PS2, or RE4, or Psi Ops or even Burnout 3 or 4 ... all have beautiful graphics and great 3D sound (I play my g

  • So uhm.. Microsoft has done this for 4 years + (Score:5, Insightful)

    by cybrthng ( 22291 ) on Saturday November 19, 2005 @02:45PM (#14071711) Homepage Journal
    Why would they expect failure now?

    Microsoft *DOES* produce other devices and they know the manufacturing/shop floor management. (They run facilities and design the software that manages them)

    I think MS knows what they're getting into.
    • Why would they expect failure now?

      Microsoft *DOES* produce other devices and they know the manufacturing/shop floor management. (They run facilities and design the software that manages them)

      I think you answered your own question there.

  • Something I've not seen mentioned anywhere (even on MS's site) and thought I'd ask: does the xbox 2 has the ability to play xbox 1 games?

  • Interesting article (Score:5, Insightful)

    by Aphrika ( 756248 ) on Saturday November 19, 2005 @02:51PM (#14071754)
    But doesn't this hold true for all cutting-edge devices that rely on a single configuration to work? Dell to a degree are lucky because their inventory is built from off the shelf components which can be interchanged at short notice to give working product, but if you look at shortages of devices such as the Sony PSP, you find that there's a trade-off between time-to-market and component availability.

    The upshot of this initial position is that over time the component costs come down, meaning a larger profit margin (or in the case of the X-box, a smaller loss), eventually leading to a machine redesign to minimise component count (look at the original Playstation configurations for examples of that), and eventually reducing the physical plastics cost my changing the form factor (PS and PS2).

    Microsoft have chosen an interesting path with the 360; a combination of off-the-shelf components that are almost obsolete in retail channels such as the 20GB drive combined with unique items such as the processor and GPU. It's a neat strategy that reminds me of the way the Commodore Amiga was designed; custom chips for the guts of the machine supported by OTS components to keep costs down. It should be an interesting machine to watch, my only hope being that they aren't daft enough to supercede it too quickly.

  • Microsoft Owns the Rights on All the Components (Score:5, Interesting)

    by MLopat ( 848735 ) on Saturday November 19, 2005 @03:20PM (#14071884) Homepage
    That's right, we got the rights to all the components. That includes the CPU, wireless hardware, the bridges and even the GPU. So, if anyone along the way in the supply chain screws up by providing flakey hardware or limiting supply, we get a new supplier.

    If you look at the Anandtech review where they disassemble the 360, you'll notice every component is branded with the Microsoft logo!

    • Re:Microsoft Owns the Rights on All the Components (Score:5, Informative)

      by SiMac ( 409541 ) on Saturday November 19, 2005 @03:48PM (#14072024) Homepage
      Microsoft doesn't exactly own the rights on the components, but it's pretty close to. According to the Anandtech article, they have a license to manufacture the CPU. Likely (personally, I haven't confirmed it, but it seems probable), they have a license to manufacture the rest of the components as well. So you're correct that they can find another supplier if someone screws up.

      "Full rights" to the CPU would mean they could also, for example, modify the design and license others to use their modified design. Suddenly, Microsoft becomes a powerful player in the embedded processor market by selling other people a chip that contains the results of decades of IBM R&D. IBM would, most likely, never let anyone do that, not even Microsoft.
    • And getting a 2nd supplier for a component isn't quite as easy as you make it out. This is a better defense against what NVidia did to MS (withhold try to renegotiate the pricing) than for covering regular component shortages.

      For a regular shortage, it'll take so long to get the 2nd source up and running (even with the rights to do so) that it won't save you a lot of pain.

      But it eliminates the possibility of a company being able to withdraw their component and put your production on hold indefinitely.

      I also
    • Wait... so does that mean I can finally quote a Microsoft employee as saying "All your rights are belong to us?" :D
  • Now all the rabid anti-MSFT activists will head to Memphis to find the Ingram Micro distribution center and disrupt shipments. Hopefully they will eat some BBQ and visit Sun Studios while they are in town (skip Graceland...other than the trophy room, it's overrated).
    • Actually Ingram Micro no longer has a Memphis location. That one got shut down in favor of the Millington location. :P I worked there, just giving ya a heads-up. And knowing how crappy some of the shipping companies have been acting lately in here, (the Dell Laptop fiasco in my journal just being one that I've bothered reporting about,) I have a feeling it's not shortage of supplies/components, I'd be more worried about them getting lost or delayed. I rely upon my experience working many of the warehouses h
  • I'm getting a 360 already, shut up about the slashvertisements!!! ... Though I'll wait till next year [e.g. March] to pick mine up.

    Tom
  • Shipping something which is essentially a dumb client to Windows XP Media Edition and is incapable of storing video doesn't sound like supporting entertainment of all forms to me. Even the the original XBox could be hacked into such a system, suggesting that MS deliberately crippled their new console.

    • Re:Entertainment of all forms (Score:4, Insightful)

      by Neopoleon ( 874543 ) on Saturday November 19, 2005 @05:12PM (#14072375) Homepage
      "Even the the original XBox could be hacked into such a system, suggesting that MS deliberately crippled their new console."

      If you want to do something with the 360 for which it wasn't designed, and if that something turns out not to work, then it isn't a matter of the device being "crippled."

      You don't say your car is crippled when you drive it into a lake and find that it doesn't float quite as well as you were hoping. You just get out (if you can), walk up to shore, and say, "Hey - guess it's not one of those floaty car things."
      • Sorry, but that's the most stupid analogy I've ever heard. The XBox 360 is more than capable of acting as a media jukebox without changing a single resistor in the console. As it is capable of storing MP3s, it makes no sense whatsoever that it cannot store movies as well. It has the capacity and has ample CPU to do it. Neither does it make sense that it couldn't rip DVDs either come to that. No mods are required for any of these things.

        So why restrict movie support on the device? Why can it play movies fr

    • Shipping something which is essentially a dumb client to Windows XP Media Edition and is incapable of storing video doesn't sound like supporting entertainment of all forms to me. Even the the original XBox could be hacked into such a system, suggesting that MS deliberately crippled their new console

      Sad, you really don't get it... The XBox 360 is a Media Hub, not a Media SERVER. You use your computers and SERVERS to SERVER the media to it...

      • I do get it. The XBox 360 requires an expensive PC (or PC / TV) running Microsoft software to stream content to it when it is more than capable of doing for itself from its own harddrive. The media playing functionality of XBox is crippleware, pure and simple. There is no logical reason for such a convoluted setup except to drive sales of two Microsoft product lines and to require consumers to buy both in order to use the functionality that one could do in its sleep.
        • do get it. The XBox 360 requires an expensive PC (or PC / TV) running Microsoft software to stream content to it when it is more than capable of doing for itself from its own harddrive. The media playing functionality of XBox is crippleware, pure and simple. There is no logical reason for such a convoluted setup except to drive sales of two Microsoft product lines and to require consumers to buy both in order to use the functionality that one could do in its sleep.

          No you don't get it... Using the Harddrive

  • This is brilliant (Score:2, Interesting)

    by Locutus ( 9039 )
    Just as word got out that Microsoft would limit supply of the new xbox in order to leverage the massive amounts of free press this gets( remember the Elmo press coverage? ), Microsoft pushes out a story of how fragile their production process is. Brilliant I say. Now it'll be easy to blame the supply chain instead of getting called on holding back production... Wait, isn't the WSJ.com usually a fee based site? Hmm, no problem getting to this article so I guess we have a sponsor to thank for this. Now who co
    • RTA:
      Mr. Holmdahl is the Microsoft vice president in charge of Xbox manufacturing.... Mr. Holmdahl says he's confident the chip supply will hold strong. "There will be plenty of consoles available" for the holidays, he says.
      • I did RTA, but you must believe that what a Microsoft executive states to the press is true and factual. I've seen little proof of this being the case over the last 20 years so it must be regarded as meaningless. And actually, it's usually the opposite of what they say...

        Did he say there would be plenty of consoles available? Let's wait and see if this actually holds true. There's always a first time.

        LoB
        • I did RTA, but you must believe that what a Microsoft executive states to the press is true and factual.
          Fair enough. Anyways it's interesting to see the tension between the manufacturing guy who wants to make sure people know Microsoft has all the consoles it planned for, and the marketing guys who want a shortage, or at least the appearance of one.
    • Funny, I posted something similar and get modded flamebait. http://developers.slashdot.org/comments.pl?sid=168 693&cid=14071694 [slashdot.org]

  • Article summary: (Score:5, Insightful)

    by deacon ( 40533 ) on Saturday November 19, 2005 @03:49PM (#14072030) Journal
    I want the 4 minutes spent reading the article back.

    A breathless journalist discovers that putting a product thru manufacturing requires coordination of lots of small parts, from many different vendors and countries. Journalist also learns that a screw-up in any of these parts will cause a PROBLEM!

    Here is a newsflash for Journalists: The xbox is trivial to manufacture compared to other products. Go tour a plant making large Xerox machines, or a Toyota factory, if you want to see something which actually has a challange to it.

    This article seems more like an ad for what is in reality a small, cheap, and disposable PC with some ductwork in it, a technology that was used on mainframes 20 years ago. This smells like an attempt to make people believe in "genius which is xbox"

    I think there should be a new rule for journalists (and for school teachers as well): You are not allowed to write/teach about something technical (math, science, engineering) until you have spent time doing it professionaly. No more "how they build the widget" articles unless you are a manufacturing engineer with factory experience. Cut down of some of this fluff.

    • Here is a newsflash for Journalists: The xbox is trivial to manufacture compared to other products. Go tour a plant making large Xerox machines, or a Toyota factory, if you want to see something which actually has a challange to it.

      Perhaps that will happen when Toyota or Xerox spend a large amount of money hyping their latest product. If anyone believes this "journalist" is doing this story for anything other than advertising for MS, I've got a bridge to sell you.
  • Or a Boeing 777?

    And making sure all of those parts are in ample supply is trivial?

    For that matter, how many "parts" does Windows XP have, and how is Microsoft managing to make sure they all work?
  • I mean, really, posting that in Slashdot is like posting the blueprints to the White House on the AlQaeda website.

    Go ahead, tell me you read phrases like "one manufacturing misstep -- a shortage of graphics chips or a recalled hard drive -- could derail those ambitions and drag Microsoft's unprofitable videogame business even deeper into the red" and didn't start thinking "mmmhh... what can I do to help?".
       

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