Blackfriars' Marketing

Wednesday, November 23, 2005

XBox 360 production shortages roundup

Ars Technica has a great article today on Xbox 360 production shortages. Blackfriars has been projecting that actual pre-Christmas sales will be less than 1 million for a while. That prediction is looking likelier and likelier. One particular note caught my eye in the article:


The parents were leaving the store with sad looks on their faces. This is because one employee actually said that they do not expect to receive another major shipment of Xbox 360s until February of 2006.

I was shocked when I heard that. Microsoft had intimated that they would avoid a repeat of the miserable PlayStation 2 launch by keeping a constant supply of units floating into stores. But on the ground, that's not what I'm being told by people at the stores. The mantra today is "not in time for Christmas," as employees apologetically feign sympathy with the Xbox-less. It has been said that Microsoft wanted to avoid a December spike followed by the two month slump. Right now, it looks like we're going to see a November spike followed by a 2-3 month slump.

Based upon Microsoft's comments, I had expected resupply shipments to be every one to two weeks. What this article states is that the major retailers won't see resupply shipments for months. Yikes.

On the business side, Business Week is noting that Microsoft is actually losing more than $126 per XBox 360 Premium sold. Again, that's worse than our predictions, implying that XBox 360 sales will contribute nine-digit losses to Microsoft this holiday season. Double yikes.

Meanwhile, Google has about 7,450 articles on XBox 360 today, fulfilling our media blitz prediction for this slow news week. Expect the news of the backlash around XBox 360 shortages to hit a peak about second week in December when the rest of the world-wide XBox 360 launches are complete, and US gamers start asking, "Why do they get XBoxes when I pre-ordered mine in July?"

However, since Black Friday is bearing down on us, I'm going to try to shift topics to some other in-demand products in coming blog posts. Sounds like XBox 360 shortages are getting good coverage.

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