Microsoft Aims For 15 Million 360s By Next Year

Gamespot is carrying the news that Microsoft is aiming to sell 13 to 15 Million consoles by June of next year. The story shows good and bad news for the company; While they've already sold 5 Million units, the Home Entertainment division lost about $1.2 billion for the last year. From the article: "Will Microsoft make its goal in the face of not one, but two rival next-gen console launches this fall? That remains to be determined, but the console will have the advantage of being cheaper than the Sony PlayStation 3 and having a bigger game library than the Nintendo Wii. The upcoming 12 months will also see several exclusive 'system seller' titles be released for the 360, including Epic Games' Gears of War, which is tentatively due this holiday season." Kotaku points out that, to sweeten the pot, a new bundle pack may be in the offing for the system.

Comments

No problem

[eln]

I think they can hit that mark easily. 15 million units produced should be no problem in that timeframe.

Oh, sold? Well, that could be more of a problem.

Re:No problem

[Rayonic]

Shipped = Sold

Microsoft sells Xbox 360's to stores. Thus, they've sold every one they ship. Most companies cite this metric, since it's the most direct relevant measurement they can get their hands on. (As opposed to calling up the store chains, etc.)

Of course, fan-bots will say: "They shipped 5 million, but only sold 1 million!" That is a highly unlikely scenario, however. I mean, if you ran some national department store chain, and you had stacks of a product lying around, why would you order more? The only real danger of overstock is right when a product launches.

So, while there is a number lag between when MS ships a unit and when it arrives in the hands of a consumer, it is not a statistical majority. If MS stops releasing new "X million boxes shipped!" statements, then you'll know they're in trouble. Otherwise, if they later announce "7 million boxes shipped", then it's reasonably safe to assume that at least 5 million have been purchased by end users.

Re:No problem

[KDR_11k]

Most manufacturers of such expensive items (especially ones with such small profit margins, a few bucks per console go to the retailer IIRC) have to offer buying back unsold stock before larger retailers start stocking it. After all each unsold XBox 360 would eat the profits made from a hundred sold XBox 360s.

Smaller library

[Generic Guy]

...having a bigger game library than the Nintendo Wii.

Let's be realistic here. The Wii will have Gamecube backwards compatibility, as well as the reported classic system emulations giving it a large library right from the get go. I'm sure the PS3 will also have a decent level of backwards compatibility as well. Backwards compatibility for the Xbox360 has been extremely hit-and-miss -- Dubious at best, certainly over-hyped, which forces Microsoft to rely on building new expensive titles for their new system. I predict their 15 million units prediction is also over-hyped.

Re:Smaller library

[grumbel]

### There's lots compatibile including virtually all the AAA titles.

Isn't that part of the problem? Its nice to have support for AAA titels, but most people already have played them over and over again and there is a good chance that those AAA titles will get a successor sooner or later anyway, so at least for me I don't really consider AAA titles that important, at least not really more important then the rest and looking at that list Yager, Shenmue, Panzer Dragon, Psychonauts, BrokenSword, Fahrenheit, Advent Rising, Riddik, X-Men Legends 1 and 2, TimeSplitters2 and 3 all not listed, all quite good games, all games I own. So while the backward compability might be better then nothing, it is *FAR* away from being an XBox1 replacemet, since the fraction of games that work is still quite small compared to those games that are on the market.

What makes things even worse is that Microsoft doesn't have offer any way to bundle XBox360 binaries with newly released XBox1 games, meaning even when a new XBox1 game is released there is nothing the developers can do to get XBox360 compability out of the box, it all depends on Microsoft to provide a patch or maybe not depending on the gamers luck. The transition from XBox to XBox360 is really far from optimal and I have some doubts that it will ever get much better before the XBox1 finally fades away completly.

Step 1...

[tomstdenis]

1. Make less suck.

Taking 300W, putting out enough heat to warm a house during a Siberian winter and catching on fire is not the first way to win over customers. :-)

Tom

they seem to be right on target

[Frag-A-Muffin]

Home Entertainment division lost about $1.2 billion for the last year.

They're on track to lose $4+ billion for this generation console. That's their goal right?! Just like the last one?! ;)

Veering OT

[killmenow]

I fear you have little experience in retail. Most large retailers (*cough*Wal-Mart*cough*) require the ability to return unsold stock to you and get their money back. Technically, even though the retailer may have bought the units, and have them sitting on shelves in stores, you cannot book it as sales revenue without also booking the RMA liability dollars (though some accountants are well paid for finding ways of doing so anyhow). Anyway, shipped is a long way from sold.

Also, most large retailers have corporate buyers with certain authority what to buy, etc. as well as local buyers with some authority to buy and stock items particular to that given store. It is not at all unheard of, however unfortunate it might seem, that a corporate buyer is buying on a contract, purchase X number of units of some widget, sends a percentage of them to each store, even though some stores have pallets of them sitting in the back wasting space. That's when those "pre-authorized" RMAs start coming in handy.

It is also common to have store FOO returning product while store BAR is buying more even though it is often less expensive to simply stock transfer products from FOO to BAR. A lot of it depends on the corporate structure and culture, the accounting setup, operating procedures, etc., and all that other corporate crap. I've seen managers of various levels refuse to ship stock from their store to another, even though they don't need it, the other store does, and there is nothing technically forbidding them from doing so...due to departmental and budgetary boundary lines (ie., some corporate structures, while looking good on paper, tend to create fiefdoms, enhance corporate politics, and all that jazz). Just remember: retailers aren't all perfectly oiled machines or even that adeptly managed. Just like anything else where people are involved. Nobody's perfect and it shows up more when there's less nobody around, if you catch my drift.