Microsoft Abandons 360 Sale Target

Next Generation is reporting that Microsoft has, reluctantly, admitted they won't hit their 90 day sales target for the Xbox 360. From the article: "In a report in today's Financial Times, the company shifted its attention to the longer-term target outlined at CES last week. The firm now says it will hit sales of 4 million to 5.5 million by the end of its financial year, in June. Analysts believe sales of the console had hit around 1.3 million by the end of the Holiday sales period. But as January moves along, retailers have yet to see evidence of shortages easing."

Comments

Not a result of M$

[the computer guy nex]

but rather all the companies hired to make the pieces. Thats the problem when you auction out each individual piece of a console to the lowest bidder - one of them missing their mark pushes everything back.

Good news for them is the PS3 launch is looking further and further out, possibly 2007.

Let's use logic

[faloi]

If we don't technically produce enough units to meet our sales goals, we can't possibly hit our targets. My cynical side can't see an easy to turn this into another way to massage a manufactured shortage to continue to pump demand, but I suppose it's possible. Part of me does wonder if there are a lot of units tied up in bundled packages that aren't selling, though.

I do wonder...

[Fred Or Alive]

If anyone still seriously thinks the Xbox 360 "shortage" is all planned by Microsoft.

The Xbox 360 launch has definatley been a bit of a screw up for them. If only for not getting enough systems into shops. Microsoft's plan was to launch early and try and get a lead on the PS3, but they just can't seem to actually get enough units out...

Re:I do wonder...

[NanoGator]

"If anyone still seriously thinks the Xbox 360 "shortage" is all planned by Microsoft."

I got an idea! We'll sell more XBOX360's by not making them available for purchase!

</Slashdot Logic>

Bundles Save!

[fwitness]

I don't know what you mean about bundles. I mean you can get a great deal right now on a 360. Hell, if you buy that system with the extra third wireless controller, you *save*! By my calculations you Toys R Us saves you exactly erm...$0. That's not the point though, you can have your XBox360 now!! Limited time only!

Re:This is still impressive

[Furry Ice]

Actually, the PS2 sold 510,000 units on the first DAY in America. Even the Dreamcast sold more than 200,000 on the first day. http://en.wikipedia.org/wiki/Playstation_2#Sales_R ecord

The most ironical part?

[SharpFang]

The most ironical part? Lower XBox sales mean higher profits at end of financial year for Microsoft.
It will take quite a while till the games start paying back the loss generated by each unit sold. Probably 2 financial years till XBox360 investments break even, maybe 4 for any real profit. Currently the more XBoxes are sold, the more Microsoft loses, at least short-term. Bigger sales = bigger losses.

Re:The most ironical part?

[joranbelar]

The most ironical part?

That "ironical" isn't a word?

Lower XBox sales mean higher profits at end of financial year for Microsoft.

Uh, no. Simple math here - if you sell less, you bring in less money. If you bring in less money, you get LOWER profits.

It will take quite a while till the games start paying back the loss generated by each unit sold.

What on earth are you talking about? The loss comes at the time of MANUFACTURING, if they SELL it, they get back a portion of that loss. While it's true that it might not cover the entire cost of the unit, it is better than not covering any part of the cost of the unit at all!

Currently the more XBoxes are sold, the more Microsoft loses, at least short-term.

No! No no no! Stop parroting a ridiculous meme whose concept you don't even understand!

Bigger sales = bigger losses.

NO! Quit repeating yourself! There is no universe that exists where taking in LESS money means you make MORE money.

Buying an X-Box 360 will not cause Microsoft to lose money! They already put the money down when they built the thing! NOT buying it will cause them to lose what money they did invest in building it!

Re:The most ironical part?

[SharpFang]

That "ironical" isn't a word?
Wrong, it is.

Uh, no. Simple math here - if you sell less, you bring in less money. If you bring in less money, you get LOWER profits.

Selling what? Air? Sand? You're talking about selling damn expensive devices.

What on earth are you talking about? The loss comes at the time of MANUFACTURING, if they SELL it, they get back a portion of that loss.

And you think the current store supply is sufficient to fill demand for XBox360 till June? Do you really think Microsoft is too poor to use JIT?
Storage inbetween production and sales is a small insignificant margin. In modern manufacturing it contains at most 3 days worth of sales of given product.

There is no universe that exists where taking in LESS money means you make MORE money.

Let's take this school task:
In January shares of SCO were $1/share and IBM shares were $15/share.
Silly joranbelar bought 50 shares of SCO paying a total $50, and 10 shares of IBM paying a total of $150. He spent $200.
Meantime smart Sharpfang bought 5 shares of SCO paying $5 and 13 shares of IBM paying $195. He also spent $200.
In August both joranbelar and Sharpfang decided to sell their shares. In the meantime SCO lost the litigation, resulting in shares dropping to $0.10 and IBM signed a new contract with Apple resulting in its shares gaining value of $20.
As result Sharpfang got $260.50 and joranbelar earned $205.
Sharpfang earned $60.50 by selling 18 shares. joranbelar earned $6 by selling 60 shares.

Bigger sales = more manufactured = bigger losses.
Less sold = less manufactured = lower losses.
Got it?