
Xbox Shortages Continue, Console Meeting Goals 66
Eurogamer reports that Microsoft is finally beginning to get some more 360 consoles into the retail channel. From the article: "Xbox does not announce details of shipments, but I can tell you that we're on track to meet our 90 day forecast of 2.75 to 3.0 million units ..." Despite that level of success, Microsoft is still disappointed with production levels and sales.
Re:Shortage reason... (Score:3, Insightful)
Anyone who'd have bought it in Spring 2006 can still buy it in Spring 2006. If they can't get one because they're all sold out now, they're not waiting any longer than they would have if Microsoft had held off the release as you say they should have.
Re:Great question, sherlock! (Score:2)
Re:Great question, sherlock! (Score:2)
Re:Great question, sherlock! (Score:2, Insightful)
IT isnt clear at all that they're using scarcity as a factor, you dont leave a good chunk of your pre-orderers without there product. Those are you most valuable customers and they have very little impact on the walk in rush that gets the media headlines. Makes no sense for them not to fulfill those orders. There's also the fact that th
Re:Great question, sherlock! (Score:5, Insightful)
Scenario A: MS is capable of making 500,000 units and delivering them to the USA. They do and sell 450,000 by the end of the year (I think they'd sell out, but I'll be cautious). They therefor take in 450,000 * $350 (average price of the two SKUs), or $157,500,000 gross.
Scenario B: MS is capable of making 500,000 units and delivering them to the USA. They make 300,000 and sell them all fast. They end up with tons of pent up demand (150,000 ready buyers according to my numbers). XBox 360s go for as high as $1000 each on eBay. MS makes 300,000 * $350 (because they only get retail) or $105,000,000 dollars. They lost out on a possible $52,500,000 which would be 33% or ONE THIRD of their possible gross intake.
So by making a shortage they:
I see ONE of those that is good for them. That means they traded $50 MILLION for good press. Don't you think that $25 million could have bought them good press?
Your logic makes absolutely no business sense. The only way your idea would work would be if (as someone in an article suggested, someone from Forbes or CNN perhaps) MS sold them auction format or on a sliding scale against demand so that when the 360s sell for $800, MS gets $780 of it instead of $330.
But they didn't do that. So a false shortage makes NO ECONOMIC OR BUSINESS SENSE. If you disagree, please (using my hypothetical numbers) show me how they would have derived more than $50,000,000 worth of benefit with the false shortage.
Re:Great question, sherlock! (Score:1)
It's happening on eBay. I'm amazed people would pay that much for something that they know they could get at a regular price after the holidays.
Re:Great question, sherlock! (Score:5, Funny)
Re:Great question, sherlock! (Score:1)
When they flood the market after Christmas, hopefully (from Microsoft's viewpoint), that demand will still be there and people will gobble them up.
On the other hand, it is possibly that Microsoft is trying to cut losses while getting big demand and good press, since they actually lose money on each console they sell. Therefore selling more equates to more money lost for Microsoft.
Re:Great question, sherlock! (Score:1)
Re:Great question, sherlock! (Score:3, Interesting)
MS is using a sales tactic that has been used by other companies in the past. I have been in sales and marketing for nearly 20 years and have seen this many times.
What has happened is that MS wants to sell Japan more than anywhere else. They are ok with their sale here at home and so so in Europe. But they time and again have stated that they must sell in Japan.
There were several routes that could have been taken, and the one they have used is the most risky and only a very bold or arrogant company wou
Re:Great question, sherlock! (Score:2, Funny)
It's strange, then, that you never saw the "enter" key.
Re:Great question, sherlock! (Score:1)
Microsoft makes money on these (in order of highest profit):
1. XBox Live Marketplace point cards
2. XBox Live Gold subscrptions
3. Acessories like extra controllers, Wi-Fi adapaters, and faceplates
4. Games
In order to use these items. YOU MUST HAVE AN XBOX 360!
During the holidays, people are the most willing to splurge on the aformentioned extras. Retailers want to move these items NOW! They won't move after Christmas and retailers will b
Re:Great question, sherlock! (Score:1)
Neither does making a product division that loses $4 billion.
Re:Great question, sherlock! (Score:1)
The point of all this is that MS has sunk a huge amount of cash into th
Re:Great question, sherlock! (Score:1)
Your fancy formatting and bullets don't change the fact that your thinking is critically flawed. The black market activity which you described does not reduce the amount of consoles sold in the long term. Microsoft is betting that the black market activity will actually create hype to increase the demand for the systems in the long run, which contr
Re:Great question, sherlock! (Score:1)
Re:Great question, sherlock! (Score:3, Insightful)
Holding off two weeks wouldn't have helped supply. Assume they are building as fast as they can, using far east slaves working factories around the clock. All they could have done to improve the shortage on release would have been to start building EARLIER, stockpile
Re:Great question, sherlock! (Score:2)
Re:Great question, sherlock! (Score:1)
Re:Spin The Bottle (Score:1, Interesting)
Microsoft doesn't generally announce numbers when they're meeting expectations -- they save numbers for the quarterly results. They warn when they're performing under expectations or well over expectations.
Am I missing something? (Score:3, Informative)
I don't want one right now, but I can't understand why I keep hearing about the shortage continuing. I could easily buy 20 right now if I had the cash.
Re:Am I missing something? (Score:2)
Also, people working at EB have been known to lie or make numbers up on the spot to get you off their backs, because, you know, they bave better things to do than answer questions that aren't from customers who are actually interested in purchasing one....
Re:Am I missing something? (Score:2)
Re:Am I missing something? (Score:1)
Re:Am I missing something? (Score:1)
Here in Philadelphia, PA, there are none to be found. I wonder if blue vs. red is actually "blue vs. red states"?
Re:Am I missing something? (Score:2)
Re:Am I missing something? (Score:1)
Par for the Course (Score:3, Insightful)
1. Product defects: You don't want to get too many consoles out into the channel only to bring them back if some real show stoppers are discovered in the wild. Once you're sure everything is okay, you can make minor tweaks for the subsequent production runs using what the first run taught you.
2. No Dust Please: Too many consoles would mean some sitting on shelves gathering dust and people beginning to mumble about waiting for the first price drop. To the space conscious retailer, oversupply is probably worse than shortages.
3. Games Make Money: Each console is sold at a loss. You make your money from game royalties. Right now the number of available games is not very high and there really aren't any must have system sellers to speak of. (The Dead or Alive 4 delay killed the Japanese launch.) A console shortage minimizes money lost while game publishers catch up and hopefully produce the killer games that sell systems. *Cough*Halo 3*Cough*
Of course, I could be wrong about all of this, but in the end it does seem that something in short supply becomes all the more desirable, as long as it doesn't suck too badly.
Re:Par for the Course (Score:2)
Halo3 is going to have to be one hell of a game if it's gonna sell systems. I mean, I'm sure that most people are gonna see Halo 3 and remember how great Halo 1 was and probably just buy it anyway, but I really can't see that being a market leader. Halo2 was quite disappointing. It takes more than a continuation of a story and being able to hold 2 weapons at once to sell a 3rd sequel.
Bungie choked on marathon infinity. aside from the flechette, it was the exact same thing as Durandal.
I'm
Solution: Ship/route xbox from Japan to US (Score:2)
Because of slow start for xbox in Japan [slashdot.org] and massive discounts [slashdot.org]
Re:Solution: Ship/route xbox from Japan to US (Score:2)
Except they don't play US games. They'd have to open the box, open the case, swap chips, and then repackage it into a US box. It'd be easier to make a new 360 from scratch.
It's also possible that Microsoft underestimated.. (Score:1)
So, with this in mind, it's possible that Microsoft expected high demand for the holidays, but not q
Re:It's also possible that Microsoft underestimate (Score:2)
Maybe... but if Microsoft says they expect to sell 3 million hardware units in 90 days, then they should at least produce 3 million hardware units in about 60 days... They somehow seem to expect selling more units than they can make.
Re:It's also possible that Microsoft underestimate (Score:1)
The real reason is due to super low CPU yields. They had to fly their initial U.S. shipment in on a Boeing because of how far the low yields put them behind the 8-ball.
Post-code lottery (Score:1, Informative)
Re:Post-code lottery (Score:2)
I live in a small town near Birmingham, and the local ASDA and Argos sell Xbox 360 games, but I've not seen any consoles (I haven't checked tha local Argos's stock though), but frankly, my town's shops are crap.
So if the shortage isn't intentional.. (Score:1, Insightful)
Let me get this clarified..
one of the biggest, most powerful corporations on the planet - with approximately four years to plan this event - is having production/distribution problems?
Yup, incompetence. Case solved.
Perhaps Mr Gates would be better off donating the money he'd lose on this generation to charity.
TheN, he could leave the iNdustry to a real game coNsole compaNy.
Re:So if the shortage isn't intentional.. (Score:1)
N-Gage of course! (Score:1)
Re:So if the shortage isn't intentional.. (Score:1)
Hurry (Score:2)
Re:Hurry (Score:1)
I think CES will go like this...
1. Sony has playable demos for the PS3
2. Sony will tout all of the great features of the PS3.
3. PS3 will be AMAZING and wow everyone.
4. PS3 will come in around $400 (I think $500 will be too much), the feature set will be trimmed to get th
what? (Score:2)
Are you kidding me? Both on Launch day and last Sunday when Best Buys recieved another huge shipment every single channel was running a positive story on the Xbox. Pretty much every BB in my state had all 70 or so 360's claimed about 15 hours prior to opening.
I don't know if the shortage was deliberate, but it worked. The buzz around this system is completely unparalleled. People were waiting in line for 20 hours a month after launch date just
Bad goal-setting (Score:2)
If you meet your goals, but are disappointed with your sales... that means your goals are too low.
Goals should be set at a level where you aren't diappointed with your results when you attain them.
Of course, from a PR perspective, you've got to set goals that you can't miss -- otherwise you're a goat to the public. Your future sales, as well as your market cap, will reflect poor performance.
What M