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Microsoft's Xbox 360 Has Bumpy Quarter

pcostabel

Gold Member
Forbes

“Xbox 360, what’s the holdup?” asked Goldman Sachs analyst Rick Sherlund ahead of a meeting with Microsoft (nasdaq: MSFT - news - people ) at the Consumer Electronics Show in Las Vegas this week.

"It is clear that something disrupted the supply of Xbox 360 shipments in the quarter, and there does not appear to be any end of year catch-up in shipments,” the analyst said in a report issued Monday.

Sherlund said the actual unit shipments of Xbox 360 are difficult to quantify. He believes Microsoft may have shipped only about 1.3 million units for the quarter, based on preannouncements from Gamestop (nyse: GME - news - people ), Electronic Arts (nasdaq: ERTS - news - people ) and Activision (nasdaq: ATVI - news - people ).

“It appears to us that Microsoft may be producing at 600,000 to 800,000 units per month, likely adequate to meet our estimate of 2 million units for the March quarter,” Sherlund said.

The analyst said the sales of the original Xbox may have fallen off more quickly than expected in the quarter, "as consumers neither substituted Xbox for Xbox 360 nor purchased as many games for the older console."

"We expect pent-up demand for the next two quarters to drive Xbox revenues, so the issue at hand is production capacity and not demand,” said the analyst.
 
My guess is that something terrible happened on some of the production lines, and alot of units came out defective or not meeting the standards. MS was forced to scrap them, leading to the shortage we know.
 
AtomicShroom said:
My guess is that something terrible happened on some of the production lines, and alot of units came out defective or not meeting the standards. MS was forced to scrap them, leading to the shortage we know.

Interesting theory, and pretty possible.
 
pcostabel, your subtle trolling of Microsoft is getting tiring. I'm guessing you're the same pcostabel that CONSTANTLY bashed MS over on the old fatbabies forums, right?
 
AtomicShroom said:
My guess is that something terrible happened on some of the production lines, and alot of units came out defective or not meeting the standards. MS was forced to scrap them, leading to the shortage we know.


This is kind of known. They haven't been getting the chip yields they had forcasted.

I don't like how M$ hasn't acknowledged it though.

That's sneaky.
 
DaCocoBrova said:
I don't like how M$ hasn't acknowledged it though.

Moore acknowledged lower chip yields as the cause of the shortage.

But then, in the same breath, trumpeted the weekly replenishment strategy.
 
1.3 Million in one month puts them right on target for their 2.75 Million in 90 days goal.

So what's the problem here?
 
briefcasemanx said:
pcostabel, your subtle trolling of Microsoft is getting tiring. I'm guessing you're the same pcostabel that CONSTANTLY bashed MS over on the old fatbabies forums, right?

Uh, posting a news article with a link to the actual article is 'trolling'?
 
Kasra said:
1.3 Million in one month puts them right on target for their 2.75 Million in 90 days goal.

So what's the problem here?

The problem is that they haven't made any attempts at trying to MEET demand.

There are still tons of stores that haven't come close to filling their PRE ORDERS, which is just BS.

I'm a fan of the Xbox, but MS has seriously dropped the ball on this launch. This "shortage" is a pain and irritating. I haven't seen ONE in the stores anywhere. BE it core or premium, and stores have no clue when they'll get more.

Weekly my ass.

I'll have money to buy on next week.. do you think I'll be able to find one? Probably not.
 
Zilch said:
Uh, posting a news article with a link to the actual article is 'trolling'?

Hey, why don't I post every negative Microsoft article I can find, while simultaneously posting every positive Sony article while adding awesome captions like "sony innovates again!" and ".....but not 360 (bets on quality)"!!!

Check his threads started history, I'll be suprised if theres a single positive xbox thread, or a single negative sony thread.

Subtle.
 
Outcast2004 said:
There are still tons of stores that haven't come close to filling their PRE ORDERS, which is just BS.

The blame their lies with the stores for taking too many preorders. Microsoft does not allocate shipments based on preorders.

I haven't seen ONE in the stores anywhere. BE it core or premium, and stores have no clue when they'll get more.

Weekly my ass.

Maybe you should pay attention to the availability thread? I've bought 5 premiums, they are not that hard to find.

I'll have money to buy on next week.. do you think I'll be able to find one? Probably not.

If you actually try, yes.
 
They ARE trying to meet the demand, but they can only make them as fast as they can make them. Damn. They don't have console fairies that can just magically make more consoles.

And I have seen weekly shipments coming in to many stores that I frequent. Best Buy here has had lines for every one of their weekly shipments, and I know that Gamestop (my friend manages it) gets 2 or 3-6 consoles a week. They had some there just the other day waiting for people who preordered to come pick them up.
 
sangreal said:
The blame their lies with the stores for taking too many preorders. Microsoft does not allocate shipments based on preorders.



Maybe you should pay attention to the availability thread? I've bought 5 premiums, they are not that hard to find.



If you actually try, yes.

That's fantastic for you then. But where I am, stores havent seen ANY for some time. With the exception of Wal-Mart's New years 12 that each store got... NIL.

The line I'm getting is no they don't know when they'll getting more in. It's extremely hit or miss. Perhaps it depends on WHERE you are more than anything.

As for the stores allocations for preorders, they were told how many systems they would get for launch day. Then MS changed their tune and short shanked most of the specialty chains.

And I've "tried" as you put it. But unlike some I can't be up all day and all night scouring stores for a game system. I have to work to pay for said luxury. If they can't put them into the stores to meet the demand then fine, their loss. I can wait for a price cut even though I'm more than wiling to pay full price right now.

I had ZERO problem getting a PS2 close to launch time, in fact I've never had this much of a hassle in trying to track down an item I've been after.

Perhaps those buying multiple systems for a quick turn profit like yourself contribute to the problem of not being able to find one? NAH...couldn't be.
 
Kasra said:
1.3 Million in one month puts them right on target for their 2.75 Million in 90 days goal.

So what's the problem here?
That 1.3 million includes the systems they made before the thing came out, it's not like the production line started at midnight on 11/22. The estimates in this article put their yield at 600-800k/month which will lead to around 2 million which isn't the 2.75 [originally 3 mil, anyone remember that?] in the first 90 days.
 
Kasra said:
They ARE trying to meet the demand, but they can only make them as fast as they can make them. Damn. They don't have console fairies that can just magically make more consoles.

And I have seen weekly shipments coming in to many stores that I frequent. Best Buy here has had lines for every one of their weekly shipments, and I know that Gamestop (my friend manages it) gets 2 or 3-6 consoles a week. They had some there just the other day waiting for people who preordered to come pick them up.

I remember actively looking for a PS2 in January of 2001 and still having trouble finding one. At least MS has been pretty good about releasing systems on fixed dates so people can try to plan on getting one. When the PS2 and N64 came out, it was all about blind luck.
 
briefcasemanx said:
pcostabel, your subtle trolling of Microsoft is getting tiring. I'm guessing you're the same pcostabel that CONSTANTLY bashed MS over on the old fatbabies forums, right?

Never heard of that forum.
 
DenogginizerOS said:
I remember actively looking for a PS2 in January of 2001 and still having trouble finding one. At least MS has been pretty good about releasing systems on fixed dates so people can try to plan on getting one. When the PS2 and N64 came out, it was all about blind luck.

Perhaps mine was blind luck, but I went into Target walked right back to the electronics section and bought my PS2. This was on Valentines day of 2001.

Damn thing still BARELY works. If it werent for my imports that thing would be in a landfill by now.

Doesnt play DVD movies.
Doesnt play Blue backs
Barely boots current games.
 
briefcasemanx said:
Hey, why don't I post every negative Microsoft article I can find, while simultaneously posting every positive Sony article while adding awesome captions like "sony innovates again!" and ".....but not 360 (bets on quality)"!!!

Check his threads started history, I'll be suprised if theres a single positive xbox thread, or a single negative sony thread.

Subtle.

Keep this accusatory crap out of the threads. If you're so offended, PM him privately. Nobody needs to hear this Sony vs. Microsoft crap in every thread. Whether or not he is a troll, what he did in this thread was NOT trolling. He linked to a legitimate article and posted its contents. If you don't appreciate that, don't participate in the thread.
 
Outcast2004 said:
Perhaps mine was blind luck, but I went into Target walked right back to the electronics section and bought my PS2. This was on Valentines day of 2001.

Damn thing still BARELY works. If it werent for my imports that thing would be in a landfill by now.

Doesnt play DVD movies.
Doesnt play Blue backs
Barely boots current games.

By February, the ebay factor will have a less of an impact, MS will have more systems, and people will be recovering from credit card debt. I think finding a 360 will greatly improve by then. However, the strength of the game selection has certainly given some of my friends more reason to get one; more so than PS2 did when it came out (their words).
 
briefcasemanx said:
pcostabel, your subtle trolling of Microsoft is getting tiring. I'm guessing you're the same pcostabel that CONSTANTLY bashed MS over on the old fatbabies forums, right?

He's one of the very few people on my ignore list (I think there are three) because he's more a PR-bot than a person.
 
Amir0x said:
Keep this accusatory crap out of the threads. If you're so offended, PM him privately. Nobody needs to hear this Sony vs. Microsoft crap in every thread.

Eh, a PM isn't going to do anything.....but will do.
 
briefcasemanx said:
Hey, why don't I post every negative Microsoft article I can find, while simultaneously posting every positive Sony article while adding awesome captions like "sony innovates again!" and ".....but not 360 (bets on quality)"!!!

Check his threads started history, I'll be suprised if theres a single positive xbox thread, or a single negative sony thread.

SURPRISE!

Edit: Ah, Ramirez. How I've missed you.
 
I think this is one of the biggest shortage of all consoles at launch. Microsoft is already writing records. I don't remember the PS2 shortage or again N64 ones being that dramatic.
To add on top of the shortage the lack of stellar games at launch, = or more defects than previous Xbox, ports, price of game getting up + accessories.

After that it was supposedly important to go first and grab the most userbase possible from Sony.... With a launch like that and ready as they seem to be, theu should have taken Sony head to head imo.
 
Wyzdom said:
I think this is one of the biggest shortage of all consoles at launch. Microsoft is already writing records. I don't remember the PS2 shortage or again N64 ones being that dramatic.
To add on top of the shortage the lack of stellar games at launch, = or more defects than previous Xbox, ports, price of game getting up + accessories.

After that it was supposedly important to go first and grab the most userbase possible from Sony.... With a launch like that and ready as they seem to be, theu should have taken Sony head to head imo.

Does anyone know haw many PS2's, N64's, etc. were sold in the first month and a half of their launch? I think we need some hard numbers before we say MS has had the WORST launch.
 
DenogginizerOS said:
Does anyone know haw many PS2's, N64's, etc. were sold in the first month and a half of their launch? I think we need some hard numbers before we say MS has had the WORST launch.

I know we need numbers to proove it. Was i said is my impression hence my post starting by "i think".
 
RidgeCityFM said:
1 month is a quarter now? insanity!

They're talking financial quarters, kiddo. January-March, April-June, July-September, October-December.

So yes, the 4th quarter sales of the XBox 360 were a bit bumpy.
 
Zilch said:
Uh, posting a news article with a link to the actual article is 'trolling'?
This isn't a "news" article. This is a "we think that maybe something seems like it might be true or maybe not from our point of view" article.
 
briefcasemanx said:
I am at awe with the style and precision of your obscuregamingreferenceinsidejoke power.

They're two separate things. Ramirez is my avatar. Images were turned back on.
 
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