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Microsoft Reveals 360 Shortage Reason
Matt writes "In a recent interview Steve Ballmer has been quoted as saying that the shortages everyone is experiencing are simply down to lack of chips because of low yields - they even considered delaying the launch because of it. In the end they decided to push on and just try and get as many consoles out there as possible." From the article: "Repeating the company's official line on the shortage crisis, which is now threatening to entirely undo Microsoft's attempts to win the next generation war, Ballmer said, 'We are making more. All stores are getting new units each week. Can we make as many as people want? The answer is no, but not because we don't want to.'"
They probably had to drop one vendor for power supplies, or at least kill a batch of bad supplies from their inventory. You'd think they might have delays while repacking some boxes still in warehouses.
So instead of waiting until the Christmas-ish time to make everyone's gaming season merry and bright, they decided to tease us with a mediocre launch of a paltry sum of systems? Some of which were even admittedly defective, and still haven't been replaced.
It's not the open-source geek in me that says this, but as someone who has seen good and bad marketing: I can't buy that story. They want to keep the problems to a controlled population so they don't have to pull a massive recall across the nation. The thing that I can't quite get is why they did this for hype (which I'm still convinced of, until intelligently rebuked) when they could have waited a little longer to make everything go smoothly. They still would have been several months ahead of Sony.
This is why I never buy new systems until at least 6 months after release. I'll let everyone else go through the beta-testing machines and titles before I toss a few hundred dollars into something that could end up sucking for another few years. (and that goes equally for Sony and Nintendo)
Perfecting Discordia
www.stevenvansickle.com
The picture of Ballmer in that article is priceless: all he needs is a shiny helmet and a big picture of the Bill "Our Undying Leader" Gates projected on the screen behind him. :)
That and electricity arcing between his outstretched hands as he creepily intones "De. Velop. Ers."
I watched C-beams glitter in the dark near the Tannhauser gate.
Lets see here....
Who is making the chips???
IBM? Correct?
Think this is IBM's way of getting back at M$ for buying "licenses" from SCO?
Fun to think about....
As I remember, the PS2 had its lower release number due to the complete meltdown of a chip forging plant. Yet Sony, by producing its own hardware, had enough in backup store in order to at least satiate a heathly part of consumer demand.
Ravenous demand is great if you can push your product out the door to feed the slobbering consumer zombies. How many parents are going to buy their kids $400-$600 giftcards so they can pick up the box later? I'll save myself by not wagering a guess, but my own experience is that kids want something to open and play with on Christmas, not the promise of getting something, and then maybe not even before they get back to school starting. This is not a debate on the merits of the system itself, but a revelation once again of how the marketing/finance departments simply don't communicate with the nuts and bolts guys. A bad situation just got worse.
I am and always will be a stereotype, because who in their right mind prefers mono?
Comment removed based on user account deletion
Ok the yield of the chips is lower than expected. Which chips and why? Is the 360 finicky about the chips or are the chips just coming out bad? Are we talking about the main processors, the graphics processors or what? Just curious who really dropped the ball here (if anyone). Also wondering if this is just a load of bull (though don't immedeately see why it would be).
Since this is the official Microsoft version, I know which one I believe.
"All stores are getting new units each week."
This is an outright lie. I, and I'm sure others of you, have asked at stores such as Best Buy if they had yet received any more 360 units since the initial shipment. The answer was "No, but hopefully soon." This was last friday, a week and a half since the initial batch. Maybe there is a single Wal-Mart and a single Best Buy, etc. somewhere that got one or two more units after launch day, but that stretches Ballmer's assertion pretty tight. By no means was it "all stores".
Dewey, you fool! Your decimal system has played right into my hands!
How many parents are going to buy their kids $400-$600 giftcards so they can pick up the box later?
Given the association of the Xbox platform with T and M ratings on original games, not as many as one would think.
All stores are getting new units each week.
Not one store I've talked to in my area has received a second shipment, let alone all stores, as we head into week 3 of release. I wonder if a definition of *all* is what we need?
MS wanted to release this season so they could capitalize on having the Xmas season all to themselves and jump on as much early marketshare as possible in the next-gen console wars. Next Xmas will be too late. All three consoles will be available and it will be a free-for-all at retail. Thier window of mega-opportunity is right now, and they are failing to maximize on it.
Now the $500 purchases that would have gone to MS are now being spent on other gifts (not necessarily console related) and come January, people are going to be worrying about paying off holiday bills, not spending even more. How much in sales, and more importantly marketshare, have they thrown right out the window simply by not having an adequate supply?
Microsoft is all about ubiquity, not scarity. Having consumers not being able to buy however much MS product whenever they want is totally counter to thier MO. The admission by Ballmer about poor yields as quite telling. Publicly, they are disappointed. Behind the scenes, they are probably furious and ready to vomit with rage. The supply issues may not be thier fault, but that doesnt lessen the damage...
Preface: I love the PowerPC.
Okay, so, Microsoft is having problems getting chips. Don't know exactly which chips, but I'm going to make an educated guess and say it's those spiffy new powerpc chips.
Sorta makes Steve Jobs look somewhat less irrational, doesn't it? If Microsoft can't get all the chips it needs for something they're spending billions on, how on earth is Apple expected to?
That being said, I wish somebody- Motorola, IBM, whomever- had gotten their act together and come out with PowerPC chips that could compete in the (irrational) battleground that Intel laid out.
stored on computers from birth to the grave
The man is a complete incompetent, and his repeated tendency of making a fool of himself in public cannot be good for the company's business. On top of that, we've had the large amount of grumbling on MS staff blogs recently about his policies behind closed doors, as well.
Gates should replace him, and soon, before he does too much more damage. If there's one thing Microsoft can't afford these days, it's deer-in-the-headlights leadership.
no wait... hah-hah-hah-heh-*snort*-hehhehehe... OK.
Now where are all the MS fanboy's who tried to say I was wrong about the low yields now??? Hehhehe
Let's see, they already cut back one of the "cores" to increase yields, and they still can't even get a decent yield. Massive power draws, and PSU problems, random crashing, no killer app launch title... NADA.
Let's just call a spade a spade here: MS fucked up. They got greedy and fucked themselves over better than Sony or Nintendo could have ever hoped to do. I'm glad too, because as a long time gamer I don;t want gaming going in this "Hollywood" direction nor do I want Microsoft to have any part in the business. They have been detrimental to it and Sony is close behind.
These guys got too big for their britches and had nothing but dollar signs in their eyes, now they begin to really see and feel their error. I hope it hurts, and bad... I hope Balmer gets canned and I hope MS stock takes a massive nose dive. I want to see Gates' fortunes crash down around him and all because they got greedy in a business they had no business being in.
So a big FUCK YOU to Microsoft and the Xbox 360. Burn in hell, along with your profits.
http://teasphere.wordpress.com - A little spot of tea
with something like a new console system, one that's planned to be a stable standard platform for a number of years to come, wouldn't it be commonsense to delay a launch in order to ensure that there's no incredible publicity buzzkill like these bugs and shortages? personally, i was eagerly awaiting drooling over one of these, but now i'm thinking four, five, even six times if it's worth it to drop 300 smacks on something that was rushed out of the launch gates. that kinda bad publicity has gotta at least drop demand around the fringes of the market, and will make a lot more people willing to comparison shop for the next-gen console.
and the 'box shortage isn't even the tightest publicity noose MS has hanged itself with: the crashes and hardware failures are. the behavior here in shooting for the deadline regardless of the backend logistics is the same as with game publishers rushing out a buggy "final" release, then patching the crap out of it (or not). except with the crucial difference that there's no possibility of an aftermarket patch for a piece of integrated, proprietary hardware; the very advantage of having a standard, compatibility ensured gaming environment is completely fscked if the platform can't stop from blowing up.
consumers deserve to be able to rely on a product like the xbox, and i think they'd bite the bullet and wait for a later deadline if they were reassured that the product would be bug free.
/. is what happens when geeks talk. get used to it.
One would think that before Microsoft decided to run with the PPC chips they would have looked at the problems Apple had. Apple ran into similar supply issues with the G5, not to mention IBM's inability to live up to promises it made about speed increases. Those problems were affecting Apple a long time ago, and the stories were all over the tech gossip sites. Perhaps if Microsoft had kept stealing ideas from Apple and dumped the PPC chips for Intel this wouldn't be a problem.
So, it's an "outright lie" because you imagine it to be so? You probably should have stayed in school and perhaps taken "Marketing 102" where you might have learned that it's a really bad idea to piss off consumers by advertising a product that can't be purchased.
It's hardly a surprise that IBM isn't getting solid yields on processors with 3.2-GHz cores (particularly with lower power consumption and lower heat output) considering PowerMacs still haven't made it to 3 GHz - instead having to double up on processors and now on cores - and Apple never felt comfortable going to the G5 in their notebook line.
When? After parents have spent a hundred or three on their kid(s) other toys? After Christmas when spending drops? The cool thing is we have 14 days to post in this thread. So if there's no flood of 360s by the 22nd, I can remind you that your conspiracy theory was wrong.
Not that I just hate microsoft, but I really think this is a clever ploy.
Oh, and I imagine that's what Ballmer looks like when he's constipated, great picture!
Want to find other gamers to play board and role playing game
As has been already mentioned, IBM is the company fabricating the chips for Xbox360. Its also doing the same for ps3 and revolution. What usually happens with a fab like IBM, they share the same manufacturing lines between their products and their clients (ie MS,Nintendo and Sony.) Hopefully they are not all being manufactured at the fishkill plant....
Sony collaborated with IBM and Toshiba on the design of the Cell processor, but If I remember correctly, they will be manufacturing the Cell processors for the PS3 in one of their own factories.
This is classic MANUFACTURING 101. This chip will cost nothing to manufacture in 2007. It'll cost a fortune to manufacture in 2005. So they keep the supply low and expenses low temporarily.
Has anyone seen any pictures of the backlight for the xbox 360 universal remote? I'm interested in one for lirc
So you're saying Microsoft doesn't need to get as many consoles into living rooms as possible to sell software and gain market share from Sony? The PS3 comes out next year, in 2006.
The cost for the chip NOW is greater than after two years for several reasons - and one of them will be that after massive production, all quirks will be solved. So, what is now a 25% success rate product could be (after several manufacturing updates) a 75% success, reducing the cost to one third.
But there are costs (R&D mostly) that are recovered better by selling early high priced processors built at high cost than by selling late lower-priced processors built at lower cost. So, in a way, the low cost of the late age depends on the high cost and high production of the early age
If they had not released the console on time, or puched the launch back, we would have heard "Haha M$ is teh SuX0R". They release it on the promised date in limited quantities and they are still evil. I want a 360 because three of my freinds have them. They are an impressive machine. I love the controller so much I am buying a wired version to use on my PC.
What is the big deal, it sucks I have to wait til next year, but, i heard similar lamenting about the PS2. Why does one company get a free ride while the other seems to be incurring the wrath of the gamers?
As far as I know, they are.
Microsoft ships to distribution centers. It is up to the distribution centers to decide which stores get the product. Just because the distribution centers decided the stores you talked to were a low priority doesn't mean Microsoft isn't shipping product to those distribution centers...
-everphilski-
Your rationale here makes too much sense. MS should have been able to see that Apple has had longstanding PPC production issues with both Moto and IBM, but their hubris keeps blinding them into thinking that these are problems with Apple itself, and not something that they (MS) wouldn't be able to overcome.
Be a real patriot: Question authority. Think for yourself. Formulate your own conclusions.
You go Ballmer.. Awww, I feel so sorry about this people who have crashing game systems. You know anything from MicroSuxx rots. Excuse me while I go play my Dreamcast. *puts in a burnt CD* Wow! it plays, learn from the fallen , XBox..
i do not suffer from Insanity... I revel in it.
Yeah, my local Walmart (not remotely rural, either) had six core systems, two normal. Most other stores seemed to go the opposite route, but it isn't an impossibility or anything.
There is no excellent beauty that hath not some strangeness in the proportion. -- Francis Bacon
It's like THIS: 1. Gifter wants to get recipeint an Xbox 360 2. Xbox 360 unavaliable, because (FOR WHATEVER REASON) M$ Fucked up 3. Now Gifter gets the "next best" gaming related gift, the PSP. (the gifter has to give something for Xmas) 4. Now that the recipeint has a PSP, Sony wins more software sales. 5. When person has disposable income again (probably a good 6 months with the amount spent on xmas nowadays) to buy Next Gen Console himself, he buys the PS3 because of the UMD adapter that is available so he can play all his preexisting games (bet your sweet ass Sony WILL do this, or have some other killer PSP-PS3 app) HA HA HA HA HA HA HA HA! Can't wait to see Bill use the same foot gun to fuck up Vista!!!!!! ROFL - BTW, it is so NICE to see your TC beta platform have a 20% faliure rate, now I can sleep better!