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Xbox 360 'Must Sell Out' on Release Day
tlhIngan writes "According to a Norwegian retailer (as reported by Gizmodo), Microsoft's making some peculiar demands during the XBox 360 launch. In particular, each retailer is to get 20 XBox 360 consoles (6 core editions, and 14 premium editions). However, to get the full allocation, they have to ensure they will sell out on the day of release (December 2nd over there)! Plus, each console must leave the store with at *least* two games each. Is Microsoft marketing like the beanie babies again - using 'Sold Out!' as a way to hype the popularity of their machine? It may appear to be, since Microsoft recently slowed down production of the XBox 360 as well."
Oh well, I feel for people who want one on launch day, but for the first time ever I think I won't be one. I'm probably gonna hold off until Halo 3 to pick up my 360.
And of course, I'm getting a Revolution the day it comes out, if I'm here in the States. :-D
I understand that life's not fair, just why is it never unfair in my favor?
"each console must leave the store with at *least* two games each."
In other words they are FORCING the $700+ bundles that stores like GameStop are trying to force on customers, except Microsoft is ensuring that EVERY retailer in the country does this so that consumers have no choice. Nice.
Sounds very much like the retail chains' requirements, not Microsoft's.
Another possible reason they are doing this is that they want to get the machines only in the hands of the hardcore gamers and Xbox fans. Doing so will generate a lot of positive buzz. Along with the beanie baby type marketing mentioned, it could result in a huge second push of sales. That seems a bit far-fetched and conspiracy like, but you never know when it comes to MS marketing.
This sounds silly, but the traditional way to "sell out" of an item is to lower it's price. Keeping the price high by artificial fixed prices means that it's hard to "sell out".
I briefly considered buying an Xbox360, but then I saw the price. Forget it. My 3 year old computer provides enough game power for my needs. Maybe I'll buy a used console in a year or two.
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Is this really so lofty of a goal for Mircrosoft to set for their new system. Retailers should have no issue finding 20 reservists for the system. This is similar to the numbers of reservists for most other consoles (XBox, GC, PS2) and is probably a very small portion of the consumer base for any given retailer.
Each customer must also purchase 2 games. It's obviously a given that everyone will be buying at least one game (Halo 3) and then why not any of the other promising titles that come out with the release. Most (if not all) gamers like to diversify their playing experience.
The big issue here is the money of course. The premium system already will run $400 and games (I haven't checked the exact price yet) will probably run the standard $50. Anyone who is going to shell out the $400 (or $300) for the system will probably manage to scrounge up another $100 for two games.
I'll be surprised if Microsoft doesn't manage to sell out the 360 on the first day.
Plus, each console must leave the store with at *least* two games each.
I'm pretty sure this is illegal in a lot of places. (at least in the nehterlands)
I guess I don't really need to buy an Xbox 360, given the shortage and all.
each shop or chain has to sign an agreement saying that they will sell out of all 20 consoles on the release date (which is December 2 over there).
Wonder what the penalty is if the retailer can't sell them all?
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Now not only are gamers going to be forced to buy price-inflated bundles yet again, but the store won't even sell them the system if they don't drop another $100+ right then and there for two other games. I suppose if you're set on being a first adopter you'll find something you want but if you really don't care for the release titles and would rather save the extra $65 for Halo3 or something, well tough titty you're out of luck, no system for you.
Console manufacturers need to find a better way to make back costs w/o screwing over the consumer. If I want to buy just a plain console, one controller and a single game of my choosing then I should be able to. Bundles just artificially increase system prices so M$ can take less of a loss on first-sales. This is no way to treat the customers who are your primary supporters (the first-to-have crowd), although they tend to buy at any price - only making it easier for M$ to take advantage of them. And the artifical scarcity tactic only disgusts and insults me as a consumer. Either sell your product or don't but screwing around with supply to inflate demand only serves to alienate and disappoint people who are already interested in buying your product. Sorry for the rant.
-- I'm not a pessimist, I'm a realist. It's not my fault that life sucks so much. --
Plus, each console must leave the store with at *least* two games each.
A thief grabs an Xbox 360, tries to run away. Security holds him. "Sorry mister, but I'm not allowed to let anyone leave with an XBox 360 and less than two games for it!"
Justice is the sheep getting arrested while an impartial judge declares the vote void.
Well it just looks like Microsoft is making use of what marketing research seems to be telling us about human behaviour. Things that are in short supply, no matter the cause, tend to be valued more. There also seem to be more than enough hardcore gamers to create buzz on the first day no matter how much those first 20 360s cost or what the bundles are. You'd think that if people know they're being manipulated this way, they would choose not to participate, but in the end, people want what they want. So it really doesn't matter how artificial the manipulation is, some shops are still going to be mobbed.
But, given all of the above, they could still come out weak like the PSP launch if they're not careful. As the mantra goes, it's the games that really matter. If they get things like Perfect Dark Zero out on launch day then they've got a shot at a strong launch, if not there will be plenty of 360s on the shelves on days two and three.
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I really don't give a frosty crank about the system. It's the games that matter, and there's nothing out there right now that makes me want to go buy a 360 so I can play it. Right now, I'm far more inclined to put the substantial cost of the latest gen console toward a new HD TV.
Some mornings it's hardly worth chewing through the restraints to get out of bed.
how exactly is this going to be enforced, how do they intend to check up on retailers? Surely they could report back to microsoft that they'd sold two games as promised, but just hold the ones people didn't want in the stock room then order a few less over the next few weeks as the excess is sold off 'naturally'
I don't wish ill on the XBox, I think it's generally been a positive influence on the gaming industry. Here's what I think might happen though:
1. XBox 360 is released, and immediately falls into the hands of the "hardcore gamers." Invariably, most people buy a copy of Perfect Dark Zero as one of their two bundled games.
2. Those who didn't buy PDZ will tend to be disappointed, as the rest of the XBox 360 game line-up will fall somewhere between "pathetic" and "not bad but I feel like an idiot for spending $700 to play this. Where are the "OMG THAT'S AMAZING!" games???
3. These gamers, having already spent $700, will be very hesitant to spend money buying any additional games. They MIGHT be convinced to buy PDZ via word-of-mouth, hoping it's the magic game to help them justify the new system the bought.
4. Many will try to return or sell the 360, looking to back out of their $700 commitment. Anyone who *can* jump ship will try their damndest to do so.
5. Those who bought PDZ will either be happy with their system purchase, or majorly disappointed, depending on whether the game turns out to be good or not. If they're disappointed, Microsoft's word-of-mouth strategy will backfire. A consumer who is on the fence, thinking "hmmm it's $700 should I go for it," it's only gonna take a tiny little bit of negative buzz to turn them away.
6. Instead of "it must be awesome it's sold out everywhere," the mindset will be "I'm glad *I* wasn't so crazy as to spend $700 on an XBox 360. That would've been CRAZY." This means they'll need even MORE motivation to buy the system than they did at launch date. The "sold out" strategy, too, has now backfired.
7. By now it's time for the holidays. At $600-700, the 360 systems won't appear under that many Christmas trees. The ones they do appear under, the people who REALLY wanted them and pushed the limits of holiday funds to get them, will also be the first to return them, when the pendulum swings back the other direction. This is especially the case when these people consider that the PS3 launch is only 4 months away and that $700 of holiday money is the only way they'll be able to afford the PS3. It's a chance at redemption from a bad holiday shopping move.
8. At this point it's around January. By now, some more "killer apps" or pseudo-killer apps have hopefully hit the market, bolstering the 360. MS will now have 1 or 2 months to build momentum before the PS3 launch starts to loom near. They now have to fight the initial negative buzz AND the additional negative buzz from the holiday season (which will be a disappointment both in sales and marketing effect).
9. Now it's ~February. Hype is building around the PS3. Pre-orders are piling up. The next-generation graphics the XBox 360 failed to deliver are now the promise of the powerful Playstation 3. Most importantly, XBox 360 sales will grind to a halt for the simple fact that nobody is going to buy the 360 when they can take a wait-and-see approach by waiting 2 months to see what the reaction is to the PS3. And of course the 360 will probably have a price drop to try to better compete with Sony's debut.
10. The PS3 is released. Sony will no doubt make sure they've got some killer apps on launch, most notably Metal Gear Solid 4. The PS3 will likely live up to most of its hype, or at least definitively deliver to gamers what they thought they were getting with the 360 last year. If Blu-Ray high-definition movies have seiged the market by April, this will be another feather in Sony's hat, even amongst those that don't have HD sets. It's a tipping point, a useless tech spec that makes you nervous about buying the "other" system that only plays mere DVDs.
11. The console war "proper" begins. Microsoft, battle-worn, will have its cushy lead, but that lead advantage could easily be wiped out if initial PS3 sales are strong, making all of Microsoft's marketing efforts over the past 6 months all for naught. Also of note, targeting the "hardcore" gamers may prove less lucrativ
Thank you for saying this.
The Xbox 360 seems like the first Japan-style worldwide launch: Out of the gate early with few supporting games. Japanese consumers are notoriously technophilic, and in the past have bought systems on the promise of future titles and little else. US consumers have appeared the opposite: punishing the N64 for releasing with just 3 titles (even if one was one of the greatest games ever), and the Saturn for a similarly non-stellar launch.
Both were going up against competition, though, and that is where the key lies. If Microsoft knows the battle is ahead, as they are waiting for the PS3 to launch Halo 3. For now, they seem contented to launch with what appear to be underwhelming but nice games, and get a few buys before digging in their heels for the PS3 and Revolution launches. Once great games start being sold, we'll have a real battle on our hands. Expect to see blood in Christmas 2006 and 2007. This? This is just the pre-show.
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