Slashdot Mirror
Microsoft Plans Deliberate Xbox 360 Shortage
An anonymous reader writes "To ensure an immediate "sellout" of the Xbox 360 on launch day (therefore getting lots of media buzz about their new console), Microsoft will simply restrict the supply down to a trickle. My favorite part of the article: "In addition to limiting the per-store stock of consoles and having the retailers prepare to prominently note the unit's "sold out" status, Microsoft has allegedly asked Norwegian retailers to sign an agreement that they'll sell out of the consoles on the launch date."
Looks like it's not a rumour.
Oh, boy. This sort of dishonesty is becoming more and more rampant in corporate culture. As companies become larger and more powerful, they are less susceptible to the consequences of their actions. Remember Microsoft's use of fake "grassroots" letters to the editor in city papers nationwide? Or how about Sony's more recent debacle where they were caught red-handed installing rootkits on their customers computers? Of course it does not help that the US is headed up by an equally dishonest administration....
But ah well, Sony probably does the same thing. It's the media/customers that are kinda stupid for falling for these schemes...
The force that blew the Big Bang continues to accelerate.
It's not exactly original or unheard of. Plenty of other companies have done this, including Slashdot's favorite company, Apple.
I know slashdot and the nutjobs will make this out to be some part of evil conspiracy, but it's really just simple economics.
If anybody rails on MS over this, you'd have to scream about every oother company that does this too. But they won't because Microsoft is the devil.
It's not like you could ever not buy into the hype and let the things rot on the shelf by not going out to buy them on day one!
Curb CO2 emissions: Kill yourself today!
I don't own an Xbox but I am super pleased that they are coming out with the new version because it then means that the regular Xbox games and console will be coming way down in price. That means I'll be able to finally afford a console that plays games pretty darn well... probably under the current $150 going price for a new unit, and games will be relatively cheap either new or used.
:-)
Of course, I have missed out on a couple of years of playing the console but it'll still be fun for me. After all, Halo is brand new to me and I'll get the same enjoyment and playability out of it that you all did a while back.
p.s. I am the guy that buys all the games in the $5 and $10 bin, including the triple packs you can sometimes buy at Marshalls and TJMaxx.
This post brought to you by your friendly neighborhood MBA.
"Hey remember back when the PS2 came out? They tried to sell it earler than the competition, so they released a sub-par console quickly rather than wait, and didn't have nearly enough consoles to cover demand."
"Yeah, and they're the leaders of this generation..."
"Exactly, so you know what we have to do to beat Sony... release it even earlier, even buggier, and in even shorter supply!"
"Yeah, in fact, let's make the supply so damn low that it will sell out even if it fails sales targets! Then people will be impressed and buy the console once it gets back in supply."
"But how about the people who get one at launch? When they pay so much for a buggy system because of its short supply and there's barely any good games for it, won't they get pissed?"
"Yeah, but what are they gonna do? They already bought the console. And they'll completely forget about it once the good games come out (around the PS3/Revo launch)."
"Sounds good to me."
"When the atomic bomb goes off there's devastation...but when the atomic bong goes off there's celebraaaaation!"
Auctions would reduce problems with insiders who buy multiple copies of the product at retail and sell scarce goods on eBay. It would also avoid mob scenes in which desperate parents storm the doors of stores known to have the much-sought product. Finally, winning bidders would have some assurance that they will be able to get the scarce item.
Two wrongs don't make a right, but three lefts do.
Pretty cool interview with mechanical engineeer for the 360.. You can almost sense his disgust when talking about the environmental standards the new system has to live up to:0 theguts.htm
http://www.xbox.com/en-US/hardware/xbox360/xbox36
~jennifer.k~
Who cares?
:-) like fire hazardous power cables and the like. Being an early adopter just qualifies you for "sheep" status.
It isn't as if Sony and Nintendo don't do the same.
That and I'd wait for a while before buying it anyways. Let them work out the rev.1 bugs
That and who cares? If your friend gets one instead of you it means you can spend more time out of your house. It's all good.
Tom
Someday, I'll have a real sig.
federal price-fixing indictment?
... did you not read the first sentance of the summary? Sellout in one day = Lots of publicity = Lots of sales the day after
I mod down anyone who says "I will be modded down for this", regardless of the rest of their comment
Remember the PSP launch? Remember how there was ridiculous prices on ebay and for presell? Do you remember what happened launch day? The local walmart sold hardly any and had a lot left over. It makes you wonder if these companies systematically engage in PR that gives the appearance of big demand to stimulate buzz.
The Xbox360 is the same way; it looks to me that at launch there are no games worth buying combined with a high price and an admission that later consoles will be better because they'll have an HD-DVD built-in and you get the impression that this will lay a big egg on launch.
Really, is anybody chomping at the bit to get one of these *now*? Maybe in about 6-12 months, but there's nothing compelling about this right now.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
This has been going on for DECADES!!! Does anyone remember the Furby?! No, but due to its "shortages" it was the hottest toy of the year. The same was true of the Tickle-me-Elmo. Pet Rocks. Beenie-Babies. It's well known in marketing that the appearance of scarcity increases demand.
Heck, look outside all the hot clubs. The mere fact there's a line makes people think it's the cool place to be. People are sheep. Get used to it!
If someone says he and his monkey have nothing to hide, they almost certainly do.
for Microsoft if after this kind of rumors, it does not sell out at all. And to do this thing around Christmas is really not a good idea anyway. People are not going to wait till the end of januari before they can buy a Christmas present for their kids. They will buy another console, or they will wait for the next birthday/vacation.
My wife's sketchblog Blob[p]: Gastrono-me
So, the slashdot summary seems to imply that this is simply an evil marketing ploy by Microsoft. Instead, I see it as a way of keeping the new Xbox in a position where consumers don't forget about it.
If the new Xbox sold out the first day (or two) & there weren't any more units for another month (like the PS2), how many consumers are going to forget about it? How much marketing momentum do you lose when everyone has to wait a month before they can hope to get the "next big thing"?
If, on the other hand, it sells out on the first day, but customers are told that there will be another shipment in 3-4 days, they'll be a lot less likely to forget about it. Not only that, but when when they do get one, they will still have the excitement of being an early adopter - and I'm sure that will translate to more accessories being sold.
If I were a Microsoft shareholder, I'd be happy with this rollout...
The money is not going to be made by the console, it'll be made by the games, so rather than go for maximum console sales, put the limitation in place to generate hype and now the console is part of the advertising scheme and ends up being a better value for MS.
And anyway, who cares? If you understand this is a ploy it will not really affect you (unless you really really really wanted a 360 on day one). But, I doubt they would do it without having reason to believe it would boost the console's appeal to some people. People that might not have realized tactics like this are used regularly. And those people need to read some books, like "How to Lie With Statistics," to gain some perspective on advertising in genenral.
1 (short ton / firkin) = 89.1432354 slugs / keg
Hey, everybody! Check out the all new Cartmanland! It's our Graaand Opening! Cartmanland has over a hundred fabulous rides , six roller coasters , and tons of great surprises! And the best part is: You can't come!! That's right, because at Cartmanland, only I, Eric Cartman, can get in! That means only I can ride the all-new Tornado Twister, a roller coaster that splashes in the water! Wow! It's the greatest amusement park in the Colorado area! And nobody can go!! Especially Stan and Kyle!! HAHA!! So come on down to Cartmanland now! But don't plan on getting past the parking lot, 'cause remember:
So much to do at Cartmanland, but you can't come! Especially you, Stan and Kyle.
I spent 3 seconds on the arstechnica article posted and see that Microsoft has two options
1) Ship a boatload at once, then have a period where none are available
2) Stream out the shipments so that a constant, but limited supply are available
They saw from the PS2 launch, that the public reaction to option 1 wasn't very good.
So....they choose option 2.
It's a business choice made when weighing manufacturing constraints vs customer reactions.
Of course Slashdot wants to hype this up as yet another reason why Microsoft is evil, and people are biting.
Tell me, which organization here is the one playing psych games with their customers?
Help me take back Slashdot. When did 'News for Nerds' become 'FUD and Conspiracy Theories for Extremist Nutjobs'?
It is a basic human instinct to aggresively persue what is in short supply (i.e. want what you can have, a.k.a. : "wow, its sold out, it must be really good")
I am perfecting the fine art of stating the obvious.
This is actually quite a good idea from Microsoft.
Hold on, let me explain, put the pitchfork down.
Most consoles have huge date one allocations and sell out. There is then a huge gap while the manufacturer re-supplies, eventually things settle down to normal sales figures and supply can match demand.
If MS limit the number of sales on day one, they can keep units flowing into stores instead of having a slump. You'll keep people coming back and retailers won't have dry periods when they've sold out and are waiting for more stock.
It's a crazy plan, but it might just work.
-- I like the cut of your thinking, young man. - me.
Gates is the wealthiest man on the planet
No, that would be Ingvar Kamprad.
this is just once again proof on MS's crooked business "strategies"....
How is this "crooked?" They make the device. It's theirs. This is not some natural resource that only they have access to. They don't have to let anybody profit from selling it. There's no burden on retailers for this - those stores make money when people stand in line at their stores to buy things. If they don't want to be part of that process, they sure don't have to. They can sell plenty of competing products from other companies (providing, as they sign contracts with Sony or Nintendo, that they like the rules that those manufacturers expect them to follow - and don't think they're not just as restrictive).
But just like book stores that know they'd be foolish (despite a tightly controlled marketing/release plan from the publishers) not to sell the next Harry Potter book, or movie theaters that only have so many seats and have to wait until midnight to sell tickets for a new release, XBox retailers can either work with the product's manufacturer or not. They can agree to terms, and make the money, or not agree to the terms, and find another way to make money. Crooked? Crooked is telling a game manufacturer that they have to deliver a product according to your demands, and not their own wishes. It's so simple: if you don't like MS or how they deal with a product debut, then don't buy their game product as a form of entertainment. If everyone does that, then MS's wishes don't mean anything. But then, no one gets the cool toy, either. But let's try to keep a little perspective, here. It's a toy. You're getting cranky about a toy debut marketing plan.
Don't disappoint your bird dog. Go to the range.
Why is this any different to Apple's launch of the iPod, Sony's launch of the PS2 or Nintendo's launch of the Gameboy Advance? All of these "sold out" on the day of their launches.
I have no love for Microsoft whatsoever but they're just a big corporation marketing a product that they just want to sell lots of.
And if they leech money from the countless sheeple who just *have* to have something before anyone else in their street, then I say good luck to them!
Gentoo Linux - another day, another USE flag.
Did you notice that the editor's blurb has a link to the previous article, citing it as a rumor?
If you get confirmation, it's no longer a rumor. If it's no longer a rumor, it's news.
tasks(723) drafts(105) languages(484) examples(29106)
Someone tell me why a post about the article being a dupe got modded to 5-Informative? It says nothing about the article, dupe or not, nothing about the topic, and yet its still modded up to the maximum. It should be 'offtopic' since it has nothing to do with the content of the article.
/. folks are human? OMGWTF, call the police.
For me this wasn't a dupe since I hadn't read it already, yet the first comment I see is some offtopic crap about a duplicate post. What? You mean the
Note this is also offtopic, but I refuse to hide behind the AC mask, because, well, I just damn well feel like it.
And they said zombies weren't real!
Heh. This reminds me of the opening scene in Max Barry's novel, Jennifer Government. In it, some (fictional) Nike executives get together and decide that they're going to:
a) restrict supply of their new super-super-hot Nike Mercury shoes to a trickle, so the kids go *nuts* for them, then:
b) unload a few hundred thousand on the market at a hugely inflated price, and THEN:
c) since Nike knows they'll lose that "can't-find-'em-anywhere, selling-like-hotcakes" prestige once people realize they can get Mercuries anywhere, they start shooting a few of the people who buy them to further build street cred.
d) PROFIT!
So, uh, if you're lining up to buy a 360, just watch out for snipers.
Writerati
There's no conspiracy here. Microsoft expects lower sales, and the PR machine is trying to explain why. Are they trying to spin the lower sales in the best way possible? Absolutely. Are the overzealous microsoft markedroids trying to turn the limited availability into positive thing? Of course. Are they deliberately driving down supply? No. The only news is that analysts and microsoft are restating sales estimates. Microsoft says that it's due to a late start in production (believable, given how late the new dev kits were). That might be the reason, or perhaps it's because the 1st gen content is lacking. However, it would be moronic to purposefully drive down supply in order to create "buzz".
I know I'm required to hate Microsoft, but come on. As long as we're throwing out logic, why stop at "Microsoft Plans Deliberate Shortage" when you can have "J Allard Responsible for Lingbergh Baby Kidnapping"?
Unfortunately, the media is already kissing MS ass when it comes to consoles, and they somehow have built up a sizeable rabid fanboy cabal (in four years), so no, there's really no reason to do this, other than to somehow give themselves validation to these two groups (and possibly astroturf some positive spin to the rest of the public).
Yeah I was going to post something similar. People make it sound like MS has this scheme. They don't need a scheme, the shortage is a foregone conclusion. MS moved up the schedule a LOT in order to get the Xbox360 out this early. That's going to cause a lot of issues. THEN they are going to simultaniously launch in America,Europe, and Japan - three markets at once instead of a multi-tierd launch. Even if they actually made enough in time, the chances of them getting the distribution perfect is about nil.
This thing better be pretty good, because if they hit a massive shortage and the word gets out that it sucks/has crap games/etc, it's going to take a MUCH worse hit than it would have otherwise. To me the Nintendo Revolution already stole their thunder, but we'll see.
are going to provide a free copy of Dianetics, to go with the new XBox. Why get one bestseller when you can get two?
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
Summary of RoHS legislation from Farnell.
Basically, most electronic products shipped to Europe and operating under 1000V (military and medical products except for now) must not contain 6 restricted substances. One of the biggest is lead. There is a large push in many electronic industries to convert their electronic products to RoHS compliant products. It's a lot of work.
Sony and Nintendo have to do this too if they want to sell their units to Europe. From a general industry trend, Japan tends to be ahead of the game compared to US companies in terms of RoHS preparedness.
Eventually most of the entire world will have this type of legislation.
I could make it take 500 Watts and just dissipate 300 Watts as heat.
;-)
No, it couldn't. If it takes 200 watts, it must dissipate 200 watts as heat. There's just not that much juice going out over the audio/video cables.
Good luck with that all you potential vultures!
I saw through this last year with the DS and the PSP.
1 of 2 things will occur, neither good for you.
1. There will be too many consoles and the extra console will sell off at or below cost.
2. There will be SO many other people doing what you're doing that you won't be able to stickout from the crowd, and any potential profits to be made on the sale will get eaten from competition.
The idiots who start auctions out on items at 200% or higher of retail cost are the ones who'll learn the lesson hardest.
Good luck!
You can't blame the customer in situations like this. All they are are consumers who want a product.
You can't blame the profit-driven corporations, if people want to be sheep/consumers, if they want to be told what they need and what they want, and not act like the free-thinking, self-realized human beings that they have the potential of being, then f*** 'em, let them be treated that way. Round 'em up.
Every hyped gadget release is like this. Why do people buy into the hype? It's better to wait and gauge the reaction, especially after the hysteria has died down and been replaced by more level headed reviews and the number of game titles has increased.
Man, I hate when game companies do this.
:(
Many older consoles (Nintendo, I'm looking at you) use tamper-proof screws for this supposed reason. Of course, any half-serious "hacker" will find a way in, usually because these screws aren't that hard to find bits for, thanks to the Internet. A lot of the original reasoning, which I can sort of understand), was to keep casual users from opening them up and messing with them.
Unfortunately, as our Zelda cartridges age, the built-in batteries (CR2032, for anyone who cares - one of the most common "watch" batteries out there) are mostly all dead. In order to use these games anymore, you have to open them up and replace the battery.
Tamper-proof screws make this VERY difficult.
Put labels all you want, if it's warranty you're worried about. But please, understand that these things do need repair from time to time, especially after they're out of their expected lifetime. ESPECIALLY with moving parts inside (Sony, I'm looking at you!). There's nothing worse than having to wreck the casing just to get in and fix a few loose wires
Endless arguments over trivial contradictions in books written by ignorant savages to explain thunder in the dark.
Therein lies the challenge for a manufacturer auction, as their motives and marketing practices would be suspect (hence the parent post).
RichM
Data Center Knowledge
Of course the sales will be slow:
1. Parents won't see a need to buy another X-box for $300-$400, when the current one looks just fine to them.
2. Half of the launch titles are sequels, remakes, or updated sports games. The others look like regular Xbox titles with better graphics.
3. The PS2 will drop to $99 very soon.
Well, I have mixed feelings on this story. On one hand, yeah - we all know Slashdot is going to latch on tightly to any news item that puts Microsoft in a negative light, so it's immediately suspect.
On the other hand, the part that bothers me is the accusation that MS is intentionally ordering stores to "sell out" on a pre-agreed date, or trying to ensure that the "sold out" notices are prominently displayed.
There's a difference between announcing a new product and not really having much supply of it for a little while after the announcement, and orchestrating the whole thing into a sales gimmick.
I'm an Apple user/fan myself, and I think all of us are aware of Apple's "standard practice" of announcing new products before production is ramped up enough to really supply the demand. But to the best of my knowledge, Apple never pressured any resellers to sign agreements to guarantee they were "sold out" at preset dates/times, or to handle the fact they sold out in a particular fashion. That goes far above and beyond simple inability or unwillingness to supply initial demand for a new product.
"Never risk a sale today for a sale tomorrow." A salesman will always make a sale today. I wouldn't say a bad salesman is devoiding of speculating. Instead of being a salesman, they are acting as a broker which is riding the supply as a commidity market. As a broker they have different goals than a salesman mostly which servicing the consumer is secondary to making sure you maximize your distribution pool.
In previous cases with Apple, Sony, Nintendo, etc is that they were honestly out of product and production couldn't ramp up immediately. UPS would show up with a delivery of 10 units which where automatically sold. 10 more units would not show up till next week. There were simply no more units to buy no matter how long you stood in front of the electronics store or how many times you clicked refresh on Apple.com. What the article is suggesting is that MS doing is putting an artifical ceiling on supply (otherwise known as rationing). Is it a good thing to put rationing on a non-essential item?
I would perferably see a spike than to have MS trying to artifically monkey around with the market. In one case the worst they are accused is that they misjudged demand (hey it happens). In the other case there is something more meleviant is going on. I think that if they artificially hold back warehouses full of product they are looney. Make a sale today you have cash they can use now to reinvest. What would they possibly reinvest in you ask? Something wacky like increase production? If you bank on a sale tomorrow you might have twice as much cash...or they might go off and buy something else.
(For those who couldn't catch a clue with a mitt, this is sarcasm.) (And yes, I do need to include this disclaimer.)
The Independent: Reverend Spooner Arrested in Friar Tuck Incident - ISIHAC, Historical Headlines
Sony or Nintendo could shut down XBox 360 with a one page ad in a gaming mag like EGM and then do another spot in New York Times. The ad would just have to say:
1 million units made, less then 100,000 unit sold. Do the math.
You say things that offend me and I can deal with it. Can you?
I learned supply and demand fromd day1 in both my micro and macro economics classes. Its the basis of how the whole market works and its not dishonesty at all.
The sole reason we have price tags is because we have limited resources.
The economy works by supply and demand and if too much supply hits a market which erases demand then competitors leave and it self corrects. Its Microsoft's job to maximize every penny of profit as possible to establish its price equilibrium. To do that it must limit its supply so it can make more money.
But its an industry wide practice and not dishonest. Suppliers all the time decide how much to produce something and use what consumers are willing to pay for to set the price.
http://saveie6.com/
First, a supply shortage of what? Each store gets more premium consolse - the ones that have more involved production wise, as well as a higher margin - which would argue against a lack of supply.
Also, the whole idea that purchasers have to buy two games with the console (remember when a console had a FREE game?)has no basis in supply-demand. It is simply marketing to an extent that is greedy to the core. I can't see a convincing argument that this is anything other than marketing trying to create a buzz. Watch- "new xbox sells out on first day" will be news story in USA Today.
I am curious to see how they dealt with Wal-Mart. I can't imagine a Wal-Mart accepting only 20 units in each store. Two companies accostum to bullying thier business partners - who wins that one?
Yeah, like this tactic is anything new. Sony does exactly the same thing. With the PSP, they only released so many units, and of those units, a larger number were given to companies which followed sony's advertising guidelines more carefully. This is a common tactic, and shouldn't be seen as only something Microsoft would do.
BeauHD. Worst editor since kdawson.
A good example of supply and demand taking their toll is the Wizards of the Coast selling of Magic:the Gathering cards. When M:tG first came out only a few thousand sets were made. People went crazy over the game. So the next set was double the first, the third doubled that again.
;-)
:-) Like politicans - when they start saying they are going to lower your taxes what they really are saying is that they are going to increase your taxes. Soft of a bassackwards way of talking to people. Or maybe they just took classes at the Tower of miniTruth school.
Then the complaints began coming in. It seemed that some distributors were hoarding boxes of cards until the price had risen sufficiently to where they could break the box and sell the individual cards. WotC decided, therefore, to break the cycle and mass produce all of one expansion set. They choose Fallen Empires. A small set that was massively over ordered. There were six waves. The first wave of cards sold out completely. The second wave sold almost all the way. But the third, fourth, fifth, and sixth sets could not be sold. This caused many dealers to go out of business which kind of backfired against WotC who had wanted to teach the distributors a lesson. Instead, the distributors had agreements with the dealers and it was the dealers who ate the cost - not the distributors. M:tG never really recovered from this debacle and Hasbro, Inc. finally bought them out. Hasbro now controls how many cards are produce and the time schedule, and even arranges the large conventions.
Who knows - maybe Hasbro will buy Microsoft? Gack! I can see it now - instead of a paperclip we get toys that talk to us! AHHHHHHHH!!!!!!
Anyway, Microsoft is just trying out flipping the directive by the DOJ people. DOJ said they could no longer force people to sign long term contracts that gave M$ an unfair advantage by locking them in. So now they are trying the opposite. That is: to create an artificial state of panic on the part of the people who want to buy an XBox 360. By restricting the flow of widgets - er - XBoxes, they create a void which they are hoping a lot of people will come rushing into thus causing an increase in price. Sort of like how the oil companies in the 1970s faked the oil crisis and caused gas prices to go sky high, long lines, etc.... Or maybe you'd like to talk about Reliant Energy's rolling blackouts in California. Amazing how companies say to our faces "Trust us" and then stab us in the back time and again. Let's see....what are some of those slogans?
Trust us...You can rely on us...We bring good things to something or other...
Do you ever feel that you are a cow who's visiting the slaughterhouse for the second time?
Someone put a black hole in my pocket and now I'm broke.