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XBox (Games) Businesses

Microsoft Abandons 360 Sale Target 58

Posted by Zonk from the can't-keep-up dept.
Next Generation is reporting that Microsoft has, reluctantly, admitted they won't hit their 90 day sales target for the Xbox 360. From the article: "In a report in today's Financial Times, the company shifted its attention to the longer-term target outlined at CES last week. The firm now says it will hit sales of 4 million to 5.5 million by the end of its financial year, in June. Analysts believe sales of the console had hit around 1.3 million by the end of the Holiday sales period. But as January moves along, retailers have yet to see evidence of shortages easing."
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Microsoft Abandons 360 Sale Target More

Microsoft Abandons 360 Sale Target

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  • Basic economics: meet increased demand with reasonably-priced supply at the right time and you get dough. Otherwise...
  • Really I picked up my console on launch day, no line up, no wait. It was a core console, which I still see around from time to time. The hardest part was getting games for the system. If your not picky, core consoles are around, you'll just pay more in the end.

  • Not a result of M$ (Score:3, Insightful)

    by the computer guy nex ( 916959 ) on Monday January 09, 2006 @11:03AM (#14427750)
    but rather all the companies hired to make the pieces. Thats the problem when you auction out each individual piece of a console to the lowest bidder - one of them missing their mark pushes everything back.

    Good news for them is the PS3 launch is looking further and further out, possibly 2007.
    • I still think it is them, at least in part. Most console releases are met with shortages, waiting in line in the cold only to find out they're sold out already, and so forth. It's the way the companies play the game. It's how a lot of companies play the game. It worked with Tickle-me-Elmo, it's works with cars, toys, designer clothes, sports drinks - virtually everything. When people CAN'T get something, for some reason, many of them will want it MORE. You start off with a moderate demand and insufficient s
    • Good news for them is the PS3 launch is looking further and further out, possibly 2007.

      Not really, Sony sold more units of PS2 than Microsoft sold XBox360 this season.

      Sony could hold the PS3 launch until 2008 and still overtake the XBox360 within 3 months.

      I mean: Just look at the numbers: Sony sold 100 Million of PS2s, (40 million of those in North America), that's roughly 14 million each year on average and still somewhere around 10 million per year.

      Now Microsoft misses their target of 3 million wo

      • Uh-huh. There are so many things about what you said that are just wrong, so let's start with the most obvious.

        Sony has not sold 100 million PS2's. First off, the 100 million mark was meant for the PS1, not the PS2, second, it was the number of PS1's shipped not sold. The PS2 has shipped over 75 million consoles since it's release, there are no concrete statistics on how many it has sold.

        Second, unfortunately, the video game market is pretty much reaching saturation. Nearly everyone who wants a PS2

        • First off, the 100 million mark was meant for the PS1, not the PS2

          http://www.google.at/search?hl=de&ie=ISO-8859-1&q = ps2+100+million+sold&btnG=Suche&meta= [google.at]

          http://en.wikipedia.org/wiki/PlayStation_2 [wikipedia.org]

          The PS2 has shipped over 75 million consoles since it's release, there are no concrete statistics on how many it has sold.

          You honestly believe that there are millions of PS2s in the sales channel? Honestly? I mean, a few hundred thousand I can believe, but millions?

          • I stand corrected, 100 million shipped.

            But yes, I can believe there are millions of PS2s in the sales channel. The number of retail stores currently extant worldwide, even with only 1 PS2 per storefront, would put the number of unsold PS2s right about in the million range. Assume a reasonable 3 PS2s per store front, and that's at least 3 million unsold. That's not an average, it takes into account no variables, that's giving the PS2 the benefit of the doubt and assuming no retail outlet could possibly

            • That would only reduce the "really sold" units by 3%, hardly relevant for the sake of this argument.

              Also if there are really 3 million units in the stores, then it would just show how many of them are still sold, because no store wants to keep any product long on the shelfes.

  • Let's use logic (Score:4, Insightful)

    by faloi ( 738831 ) on Monday January 09, 2006 @11:03AM (#14427755)
    If we don't technically produce enough units to meet our sales goals, we can't possibly hit our targets. My cynical side can't see an easy to turn this into another way to massage a manufactured shortage to continue to pump demand, but I suppose it's possible. Part of me does wonder if there are a lot of units tied up in bundled packages that aren't selling, though.
    • I don't know what you mean about bundles. I mean you can get a great deal [amazon.com] right now on a 360. Hell, if you buy that system with the extra third wireless controller, you *save*! By my calculations you Toys R Us saves you exactly erm...$0. That's not the point though, you can have your XBox360 now!! Limited time only!
    • I think you're probably right about this all being a marketing ploy - Microsoft probably knew all-along what it could do, and set a higher number so it could issue press releases about missing it, convincing people that the hardware is just so badass it's hard to even make it, and keeping the hype machine running.

      I also think you're right about systems tied up, although it isn't just bundles. Microsoft has a whole lot of systems tied up in Japan, where nobody gives a shit - I could have a Japanese Xbox 360

  • I do wonder... (Score:4, Interesting)

    by Fred Or Alive ( 738779 ) on Monday January 09, 2006 @11:09AM (#14427812)
    If anyone still seriously thinks the Xbox 360 "shortage" is all planned by Microsoft.

    The Xbox 360 launch has definatley been a bit of a screw up for them. If only for not getting enough systems into shops. Microsoft's plan was to launch early and try and get a lead on the PS3, but they just can't seem to actually get enough units out...
    • "If anyone still seriously thinks the Xbox 360 "shortage" is all planned by Microsoft."

      I got an idea! We'll sell more XBOX360's by not making them available for purchase!
      </Slashdot Logic>
    • Microsoft missed out big time, a lot of missed sales during christmas season won't be made up till next christmas season where they have to compete against the revolution and psx3. Any who says Microsoft purposely held back production has no clue how consumer economics works. I guess MS learned that a worldwide launch doesn't work and that they pissed off their fan base who's only way of getting one still is via ebay or overpriced bundles.
  • FTA: "He added. 'That's just the way of the beast, particularly when you are ramping up factories from ground zero all the way up to full capacity.'" (Peter Moore)

    Ground zero [army-technology.com]?

    Well, I guess building XBoxes at the site of nuclear detonations might have something to do with their supply chain getting all messed up.

  • The most ironical part? (Score:3, Interesting)

    by SharpFang ( 651121 ) on Monday January 09, 2006 @11:53AM (#14428246) Homepage Journal
    The most ironical part? Lower XBox sales mean higher profits at end of financial year for Microsoft.
    It will take quite a while till the games start paying back the loss generated by each unit sold. Probably 2 financial years till XBox360 investments break even, maybe 4 for any real profit. Currently the more XBoxes are sold, the more Microsoft loses, at least short-term. Bigger sales = bigger losses.
    • The most ironical part?

      That "ironical" isn't a word?

      Lower XBox sales mean higher profits at end of financial year for Microsoft.

      Uh, no. Simple math here - if you sell less, you bring in less money. If you bring in less money, you get LOWER profits.

      It will take quite a while till the games start paying back the loss generated by each unit sold.

      What on earth are you talking about? The loss comes at the time of MANUFACTURING, if they SELL it, they get back a portion of that loss. While it's true that it

      • The most ironical part?

        That "ironical" isn't a word?

        http://dictionary.reference.com/search?q=ironical [reference.com]

        ironical adj 1: characterized by often poignant difference or incongruity between what is expected and what actually is; "madness, an ironic fate for such a clear thinker"; "it was ironical that the well-planned scheme failed so completely" [syn: ironic [reference.com]] 2: humorously sarcastic or mocking; "dry humor"; "an ironic remark often conveys an intended meaning obliquely"; "an ironic novel"; "an ironical s

      • I think he was going on the idea that Microsoft selling a 360 loses them money for each machine they build and make there money back in games (It does, they sell the systems for a loss). However, if you dont sell systems your obviously not going to sell more games, so your going to lose money anyway. You must pump out more systems at a loss, then rake in the profits on all the games that are sold on the system.

        Right now microsoft is in a bad position, they cannot meet up with demand, they cannot sell system
        • Yes, that's true that in the long term low sales of XBox may be pretty disastrous to Microsoft. But looking at the short-term perspective, we get a pretty ridiculous image where even a failure to sell something causes improvement of financial results of the Evil Empire.
          • That's the only way the anti-MS brigade can get out there and buy an XBox360 though.

            I can see it now. "Must.. hurt.. Microsoft.. by.. buying.. 360... ... and... 6 games."

            Before anyone asks, I despise console gaming for what it did to some of my favorite PC games, and will never forgive it :/
      • That "ironical" isn't a word?
        Wrong, it is. [webster.com]

        Uh, no. Simple math here - if you sell less, you bring in less money. If you bring in less money, you get LOWER profits.

        Selling what? Air? Sand? You're talking about selling damn expensive devices.

        What on earth are you talking about? The loss comes at the time of MANUFACTURING, if they SELL it, they get back a portion of that loss.

        And you think the current store supply is sufficient to fill demand for XBox360 till June? Do you really think Microsoft is too poor to u
        • You're assuming that the costs are mainly attributed to the product itself. It's certainly arguable that a very large portion of Microsoft's costs in this case are the manufacturing process itself. From the (possibly made up) reports I've seen, most of their problems are due to yield, not production capacity per se.
          The way I see it, the production costs are mostly fixed but the number of Xboxen being produced is less due to poor yield. The only way to effect losses of manufacturing cost positively would be
        • Let's see if we can figure out why this doesn't apply.

          Oh yes. Microsoft has already manufactured the units. Not only that, but any profit they are going to make on the sale of those units they have already made! That's right, they sold the units to retailers. Once the units are out of their warehouse, they've made all the money on the hardware they're going to make. It matters not one whit to Microsoft, profit-wise, if you buy an Xbox360, at least, not directly. When you go to a shop and buy your

      • I so wish I could mod this "Practically Perfect in Every Way".
  • DUH!

    when you can only sell 400k in the first day and have to spend two weeks getting your supplies back, you think it's still possible to sell 3 million?

    pfft.
  • This is not lack of demand but lack of supplies. At the moment we don't know what demand is. Could be that it tops at say 2 million (just a wild guess) and until unit 2.000.001 ships we won't know. Or rather a week later when it is still sitting unsold in the shop.

    The only bad thing about it is that the PS3 is getting nearer. As the campaign for it ramps up some people not yet lucky enough to get a 360 might decide to wait to see what the PS3 will be like.

    This about lack of production capacity, not lack o

    • "This is not lack of demand but lack of supplies."

      QFT. It's silly that Microsoft set any sales target. Apparently, they should have set a production target, since, well, they certainly didn't meet the demand that was there. It's sad to see yet another console launch marred by a lack of the product. In essence, they rushed the console out the door in time for the holidays and to beat big, bad Sony to the punch.

      That said, Microsoft is probably going to do all right since the PS3 is still a ways from relea

  • eBay listings [ebay.com] for the 360, if they are any indication, seem to show that folks aren't willing anymore to pay much, if any, of a premium beyond the suggested retail price anymore. Which is pretty shocking, when you consider that retail outlets do seem to be completely sold out... wouldn't you expect these things to be selling for more on eBay if the demand was really there?
    • It's january. Who's got the money to buy expensive luxury items now? It's buyer's market, hence lower prices.
      • Who's got the money to buy expensive luxury items now? It's buyer's market, hence lower prices.

        Still, we're talking about an item which is not actually available at retail... you'd think that if it was in really high demand, you'd be paying a decent premium to obtain one when you normally couldn't. The fact seems to be that even among people who do have the money, there isn't a feeling that the luxury item in question is extremely valuable, and the need for it isn't extremely urgent. Nobody needs one by so

  • Microsoft has been targeting 4.5 to 5.5 million units by the end of their fiscal year since the console was launched. Hell, you can find articles with those numbers in it before their launch; this one was published Nov 8th:
    * http://msnbc.msn.com/id/9968123/from/RL.5/ [msn.com]

    This article combines a bunch of random quotes out of context, and strings them together with some out of context source information in an attempt to make it look like company officials are acknowleging missing theirs sales targets.

    This doesn't

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