Predictions for the XBox 360 launch marketing success.

Here are my predictions for what we'll be reading about the XBox 360 launch this week. It's mostly a recap of things we've said before, but this pulls it together in one place with some color commentary. I predict:

1. Media coverage will be everywhere. The launch will get coverage from every major newspaper and media channel at this point (although I didn't see anything about it on the network TV news). But tomorrow night, you'll be seeing video clips of Bill Gates playing games with gamers at Best Buy as well as the big launch event in the desert.
2. Selling out will be a two-sided story. Just as we have predicted previously, a lot of the people in line to buy XBox 360s will go home empty-handed. While Microsoft reps will point to this as an indication of high demand, it will also show that our prediction of production limitations to be true as well. I predict now that the sold-out marketing strategy will actually backfire into more negative publicity than positive.
3. XBox 360 excitement will fade rapidly. While the 360 will get a lot of press this week, I doubt we'll see any more coverage until Christmas week or so. Why? Because to first order, no one will have one, so there really won't be anything to write about.
4. Launch backlash will be muted but real. Just as with the original Sony Playstation 2, there will be a backlash to the fact that Microsoft launched this console before there were a lot of good games for it. Yes, it is launching with 18 titles, but the target market -- hard core gamers -- are already finding many of these games wanting in terms of game play. As has been noted in periodicals as notable as the New York Post, it may take as much as a year before the game library makes it worth purchasing an XBox 360 for games instead of "first on my block" status.
5. Final sales tally for Christmas sales will be low -- just under one million. As we have noted many times previously, there is only about a month between the launch and the end of the year, and the production rate of XBox 360s just couldn't ramp up fast enough to hit a target of 1.6 to 1.8 million units by Christmas. I further predict that Microsoft will not report specific Christmas XBox 360 sales for just that reason; instead they'll provide quotes like, "demand far exceeded our expectations" and call it a day.

This said, Sony now has its work cut out for it. There are already rumors that its Spring launch of PS3 could be delayed. But knowing Sony, its history in gaming, and its luxurious time schedule in comparison to XBox 360, I still suspect it will create more of a splash on launch, if for no other reason than a large stable of well-crafted in-house games.

But even more interesting is Nintendo, the company almost everyone seems to be writing off. However, Nintendo is likely to launch its Revolution system around the same time as the PS3. Further, Nintendo has its innovative new one-handed controller and a devout following built from its devotion to games first and technology second. Because of the low expectations for Nintendo to be a competitor, the company could vastly exceed expectations with its launch and cause real competition for both Microsoft and Sony.

And the real proof of this battle is who will make money from their gaming business. We fully expect both Sony and Nintendo to make profits from their consoles, while Microsoft will lose about $75 to $100 on each one (they lose less on the Premium versions, more on the Core version). Microsoft has already set expectations that XBox 360 will not pull its gaming business out of the red next year. The big question is, if not now, when?

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