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....
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~
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
It's the media/customers that are kinda stupid for falling for these schemes...
You can't blame the customer in situations like this. All they are are consumers who want a product. One metric of a good product is how well it initially sells, and all that's happening here is Microsoft falsifying that metric. It's just your every day corprate dishonesty. You could blame the media for not reporting on anything but the sellout, but it wouldn't suprise me if they just didn't bother digging any deeper to find that side of the story.
I'm against picketing, but I don't know how to show it.
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.
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
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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'?
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.
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.
Hype. "It's selling out! It's popular! It's cool! I have to have it." And, mysteriously, just in time for Christmas, the second batch is manufactured and delivered and on the shelves. Better grab it NOW, before it sells out again and your child is the only one on the block who didn't get a spiffy, nifty, brand spanking new Xbox for Christmas!!!
"The legitimate powers of government extend only to such acts as are injurious to others." Thomas Jefferson.
Most people have a strong drive to conform to the standard. The reasons are too many to list. This will initially drive some people who had no opinion on the XBOX 360 to suddenly think it's cool, and desire one.
Also, when the mainstream media begins to run stories on XBOX 360's selling out everywhere, you will get nervous parents attempting to secure one in case their child wants it for christmas. Parents do not raise their kids these days, they appease them. All large companies selling to that target know this, and take advantage of it.
What's to be gained from "selling out" if the actual numbers are low? While MS can say they sold out at launch, they'd just be opening themselves up to a lot of headlines lambasting them. More than usual
This may be true in certain tech media, but probably not in the local news arena. These big conglomerate types do not like to pick fights with each other, as there are very serious long term consequences to such actions. That may also account for a significant number of stories being "squashed" by editors.
I really hate to say it, but gamer bloggers may be the biggest asset when it comes to outing Microsoft on this crap.
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"?
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.
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
"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.
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.
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