Three million XBox 360s -- but not before Christmas

It is a busy news day. Reuters says that Xbox Chief Financial Officer Bryan Lee said in New York today that Microsoft targets sales of 2.75 million to 3 million Xbox 360 units in the first 90 days after the launch date of Nov. 22.

Now we here at Blackfriars have access to some of the most advanced technology on the planet (in this case, a calendar and a calculator), and have used that access to calculate that since there are only 32 shopping days between the launch date of November 22 and Christmas, we shouldn't really expect to see all those units get made and sold by Christmas, especially given Microsoft's "Sold Out" marketing strategy. And if Microsoft expected most of those units to be sold in the holiday season, I would be willing to bet that Lee would have said so. Our call: I believe that many of those orders will be booked, but actual deliveries by December 25 will total less than 1 million due to production constraints.

Now given that Microsoft loses something north of $100 per unit on XBox 360, this is not necessarily bad news business-wise, and it will build a backlog (at least assuming that someone sells them for close to list price instead of in $1,000 bundles). But anyone expecting XBox 360 to cut into Sony's 90 million unit installed base is going to be disappointed.

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