Curmudgeon Gamer
Curmudgeoning all games equally.
21 July 2006
Why a backlog of unsold Xbox 360s?
Microsoft has come out with its numbers on Xbox 360 shipments. (Note: I'll leave Microsoft's projections of future shipment numbers for another day.) I stand by my previous estimate: no more than 4 million systems sold worldwide, realistically probably 3.5 million. That leaves a minimum of 1 million systems shipped to resellers but not sold to consolers. Why the big backlog? I have a theory.

I think Microsoft knows that Sony's going to fall on its face this holiday season. Oh, sure, Sony might sell out but it'll be selling out of many fewer systems than it had hoped to have ready. (Then demand will drop like a stone in January and February of 2007.) When Sony's system is sold out and all those PS3-less parents rationalize that they really wouldn't want to spend $700 on a system plus one game, it'll be an easy leap to drop $500 or $400 on an Xbox 360 with a game. Microsoft is hoping to divert some of that demand to their own system, and if the shelves are full and the warehouses ready to ship in reinforcements, they'll be well-positioned to do so.

There's a wee fly in the ointment, of course: the Nintendo Wii. I doubt that Nintendo will have a severe shortage of systems, since the Wii is basically a GameCube that ate a mushroom and now has a magical controller attached. Not only inexpensive for Nintendo to produce, but probably also inexpensive for parents to buy.

That leaves Mom & Dad asking if they want to drop $500 or $400 on an Xbox 360 or $250 on a Nintendo Wii.

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--Matt Matthews at 23:38
Comment [ 3 ]

Comments on this post:

Seems like a reasonable theory. PS3 is likely to be sold out quickly and also have a low shipment count come Nov/Dec.

The thing is, it's not entirely like consoles are commodity electronics. For unknowledgable parents, perhaps they are, but for adults going in to get a PS3 and not getting one, I'm not convinced they'll just say "oh, but here's a XBox 360, it's the same thing, right?".

By Blogger Dan-o, at 22 July, 2006 15:28  

For the shipped number, remember that it is Microsoft's report and they could be inflating (or rounding up) the number to something a bit more impressive.

Or maybe they even overshipped to make it look like it was selling better than it really was. Or a combination of the two...

I don't really think the Nintendo Wii will be much of a factor at Christmas though. I think Nintendo has damaged its name badly enough over the years that it simply isn't going to be an option on most Christmas lists, even as a cheaper alternative.

Heck, are all the stores that carry Sony and MS machines even going to carry the Wii? A local Sears carried the Gamecube for at most a matter of months before dropping it entirely.

And how much space are stores going to give the Wii? Space affects how people view the popularity and worth of a system as well as a company, and it should be a pretty crowded shelf this Christmas with possibly 6 systems stocked. For some reason I think Nintendo won't have much console space compared to the others.

By Anonymous Baines, at 26 July, 2006 04:34  

I think that Nintendo has a slightly tarnished image, but that they have enough recognition that most stores (with games) will have to give them space this holiday. Moreover, it's not out of the realm of possibility that the Wii could be the Tickle Me Elmo of the season -- one that appeals to the kids and the parents, no less.

But, then, if there's one system we're optimistic about around here, it's the Wii, so salt liberally.

By Blogger jvm, at 26 July, 2006 11:00  

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