The "Sold Out" marketing strategy for XBox 360

Gizmodo notes that Microsoft is requiring Norwegian retailers to guarantee all their XBox 360 units be sold out on the day of release, and they must further guarantee that every console is sold with at least two games. Given that Microsoft will have fairly low production for the launch (something Blackfriars predicted last summer), these goals are intended to maximize both PR value (predicted Nov. 22 headlines: Microsoft XBox 360 sells out world-wide on day of launch), and the retail ticket sale on what stock they have. Note that Microsoft is only supplying half as many $299 Base model XBox 360s as the more full-featured Premium versions, showing that the $399 model is the preferred product.

It's campaigns like this one that give marketing a bad name with consumers. First of all, consumers aren't going to be happy about the shortage of consoles on launch day or with the bundling strategy. LIke it or not, some consumers will want to buy their consoles from one source and their games from another. And others may want to wait to stock up on games after the holidays instead of paying full price and more before. And while that "Sold Out" sign works well for Microsoft, it will only generate resentment for retailers who might want to be able to sell XBoxs after November 22 (Microsoft makes no guarantees for when that initial stock will be replenished). Microsoft may be able to claim that the launch is a success, but you can bet that retailers burned by its marketing cleverness will be all too welcoming to Sony's PS3 in the spring -- especially if Sony takes a straight forward and retailer-friendly approach as they have in the past.

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