Microsoft abandons 3 million target

by Blake Snow { Jan 9th 2006 at 11:30AM }

Microsoft has admitted it will not meet its expected goal of 3 million Xbox 360s sold within 90 days of system launch. According to the Financial Times, the Redmond, WA company has shifted its approach to a longer term target outlined at this year's CES of 4 to 5.5 million by the end of its financial year, in June. Next-Gen writes: "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."

Console game launches are a tough business. As THQ CEO Brian Farrell notes, the "first three to six months" don't always perform as expected, due in part to lower inventories.

Reader Comments (Page 1 of 1)

DG @ Jan 9th 2006 11:43AM

The first sentence should read: "Microsoft has admitted it will not meet ITS expected goal of 3 million Xbox 360s sold within 90 days of system launch"

Buck Q. Fitch @ Jan 9th 2006 11:46AM

They shoulda made more, duh!

Snap @ Jan 9th 2006 11:49AM

Must be a lot harder to make TWO different versions of the console at launch.

"Uhm... which one goes where again guys? Green or White?! Guys?!?" - Some dude at the plant.

/flame suit on

Nate @ Jan 9th 2006 11:49AM

Great....

3 million was much too high anyways.

Now just come out with some damn games for this thing. Dead Or Alive 4 was ok....but way too hard for the casual gamer (w/ no easy difficulty) who doesn't have time to master every character (myself). Perfect Dark Zero is getting a little stale (not enough multiplayer maps). NBA 2K6 is keeping me busy for the most part....franchise plus 24/7 mode....great fun. The rest of the laucnh games didn't really hold my interest.

I need Elder Scrolls: Oblivion....or Gears Of War....

Blake Snow @ Jan 9th 2006 11:51AM

Thanks DG. It's been updated.

mark @ Jan 9th 2006 12:04PM

I just want to get one. But no...

beaker @ Jan 9th 2006 12:04PM

They are out there, but you have to look. So far, only one of my buddies have located one. So, now, I have a "friend" on Live. I work with at least 6 or 7 persons that are waiting until they are generally available.

This situation sucks. I am in the position of Xbox 360 evangelist, but there aren't a whole lot of systems to buy. A bunch of my friends are waiting for the PS3. If MS could figure out a way to make the 360 widely available, they'd probably succumb to the allure of Xbox Live (which isn't really easy to describe in words--you really have to have that capability demonstrated).

The 360 isn't anything much WITHOUT Live. With the add-ons the 360 totally rocks. How do you sell a system like that?

Lite @ Jan 9th 2006 12:09PM

they are readying for the OWNAGE about to be reaped by the PS3.

I don't see two crappy versions of the PS3 being announced....

so....F'ing....owned...

just shows the public don't like crap!

Scott @ Jan 9th 2006 12:20PM

Well, hopefully the new manufacturing partner MS announced can get more 360s out there soon.

Jeremy Wright @ Jan 9th 2006 12:29PM

I think everyone saw this coming. The next 6 months should be interesting for the 360, as it's the time it has alone in the market before the PS3. If it can't make a serious run for money in the next 6-8 months it'll lose any and all first mover advantage.

mike @ Jan 9th 2006 12:29PM

what happened to that E3 speacha bout 1 billion people owning an xbox 360? What a freakin joke. Not only will 1 billion never own a 360 (or ps3 or revolution for that matter) but theres no way microsoft could even make 1 billion xbox 360s to sell.

going by their goals for 5.5 million 360s in 7 months, it will take them 106 years to produce and sell 1 billion xbox 360s

pennywise969 @ Jan 9th 2006 12:31PM

yeah, from what ive heard, there will only be one crappy version of the PS3.

funkonaut @ Jan 9th 2006 12:38PM

Yeah, it's hard to meet your sales goal when you ship 1/3 of your inventory to Japan and sell less than 1/3 of them.

beaker @ Jan 9th 2006 12:38PM

#8. Good luck with your prognostication. You can wait, and wait, and wait some more.

I don't see Sony coming up with much until Fall. And, even then, get yourself a pre-order and pray.

I like my Live. It's a feature that I don't see Sony having in the same easy-to-use form. Live makes OWNING games worth it. I have no intentions of selling off my used-360 games because the human-to-human interaction makes the continued ownership worthwile.

I don't see Sony coming up with anything equally compelling. I still plan on buying the PS3, but that's mostly because I can't stand not having exclusive content.

Phace @ Jan 9th 2006 12:44PM

But, wait... the PS3 comes with Blu-ray, right? The drive where one manufacturer has said will be selling the first consumer version of a player beginning in June? How will Sony keep the Blu_ray in the PS3 and get it out in a decent time? It is not looking like a Q2 launch, and every month that goes by plays right into Microsoft's hands.

I had to wait 16+ hours outside a Best Buy to get me a 2nd shipment 360, but it's great. HD gaming is to die for, real surround sound- Kameo is fabulous-looking, just picked up DOA4 and the online is a bit laggy but still cool as hell. The bad thing is they all speak Japanese- even the Americans. How many cowgirls do you know that can speak Japanese and know karate? Not to mention all of the jiggly flesh that each female seems to have :-P . Still, they should be speaking English... seems like they really rushed this title... I hope they patch it on Live.

Live is great. Long live Live.

Pixelantes Anonymous @ Jan 9th 2006 1:03PM

"The 360 isn't anything much WITHOUT Live."

I don't know. If all I had was something like Call of Duty 2 single-player campaign, I'd be a pretty happy camper. That game pwns offline play.

I'm also having quite a bit of fun with PGR3's solo career. The game is, of course, more fun with online leaderboards and online racing, but if all I got was solo career, I would not complain much.

That being said, yes, the new XBox Live stuff is what the 360 is really all about though.

Jeff @ Jan 9th 2006 1:07PM

"The 360 isn't anything much WITHOUT Live. With the add-ons the 360 totally rocks. How do you sell a system like that?"

To people who just aren't that interested in online gaming, you don't. This is MS's real, long-term problem, IMO. It's one thing to not be able to satisfy initial demand, but it's another to keep that demand going once the hardcore are satiated. And you just summed up the Xbox 360's major issue in a nutshell. MS wants to believe everybody out there is a future online gamer, but if they couldn't even get 10% of Xbox users sold on XBL after a $2 billion infrastructure and marketing investment, why do they think it's gonna be any different this time? Is playing Halo 3 online really going to be a fundamentally different thing than playing Halo 2 online? I doubt it. (Note that I think Halo 3 will sell extremely well... but it'll sell extremely well to Halo fans. It's not going to expand the Xbox Live or Xbox 360 market.)

This is a different problem than what's going on now, though, which is obviously just a manufacturing issue. MS has two separate problems - the short-term problem of satisfying all the early adopters and the long-term problem of satisfying everybody else. I don't think they're on a very good path to doing either of those things right now.

SuicideNinja @ Jan 9th 2006 1:19PM

Snap, the Core and Premium packages still enclose the SAME Xbox 360 (you didn't specify). Making two different packages isn't the problem; they are having trouble with the actual systems. The controllers and hard drives seem to be in abundance. The processor and GPU are likely to be what's slowing down production.

Sony is likely to have some of the same problems because of their hardware (aka Cell). However, they do have more time to prepare to disappoint everyone.

As opposed to what Sony advocates are saying, I fully expect the games on the PS3 to be less-than-next-gen-expectations as well (although I've not had a problem with an 360 games; they look great). Programming for a Playstation 3 will again, take unnecessary hassle, so the first run of games are not likely to be that great.

Sony seems to be faltering like Nintendo did back in the day; they've lost focus and assume way too much (that doesn't mean they won't win this war though). Seems their marketing scams still work on the public though, like saying real-time in a sentence about a demo that was prerendered. Disgusting.

No rush to get a PS3 right now (screw launch days). I want the Revolution!

darryl @ Jan 9th 2006 1:29PM

"That being said, yes, the new XBox Live stuff is what the 360 is really all about though."

That you have to pay for month-to-month... Awesome!

keith @ Jan 9th 2006 1:31PM

well if microsoft where smart which lately im thinking they are not, they wouldve waited to launch the 360 this year so they couldve had enough for everyone. then they couldve made their goal. its not like they have anyone to compete against at the moment so why the rush? And why the small amount available keep messing up microsoft and your worst nightmare will happen you will lose to sony, dont think mr. gates would like that now would you Bill?

keith @ Jan 9th 2006 1:34PM

oh yeah and who was the smart guy to make the decision to run 360 live on the same network as the original that was pretty dumb to microsoft as if live doesnt lag enough as it is. keep it up the mistakes cuz your competition is watching and because of you they are learning from your mistakes. better luck next time.

DSK @ Jan 9th 2006 1:40PM

No, you don't Darryl. You can chose to pay annually you eejit.

dsub @ Jan 9th 2006 1:56PM

To #11

It was definately SONY who claimed the PS3 would make it into 1 billion homes worldwide. Only sony would be stupid and cocky enough to claim that 1 in 4 homes WORLDWIDE would own a PS3. That is the dumbest claim I have ever heard. One must assume that at least 1 billion people don't even own a television, due poverty stricken areas like africa and stuff.

mike @ Jan 9th 2006 2:07PM

they are readying for the OWNAGE about to be reaped by the PS3.

---

You mean the DS

lunatech @ Jan 9th 2006 3:13PM

"just shows the public don't like crap!"

Is that why it's sold out?

mofomojo @ Jan 9th 2006 3:50PM

I think Microsoft's real strategy was to deliver to the people who both A) really wanted a Xbox and B) would buy tons of games.

This is important to Microsoft since if this happens they can now make a profit, they're losing something like $100 per Xbox, if they can make this up they will then be in the black. So, if the people who REALLY want an Xbox must've either reserved one months in advance or had paid a ridiculous inflated price for it. Something I suspect Microsoft themselves doing.

See, most middle class consumers would not pay $2000 for a console, however, upper middle class and upper class consumers are willing to pay for this since well, they can afford it and since they can afford it, this means that they can afford dozens of games to buy with it to.

Since the people who buy the console are also buying tonnes of games, for Microsoft this means $$$.

That's my theory on how the shortage was orchestrated and well, for me, even if I did have a barrel of cash, I wouldn't bother.

Now, a lot of people are still waiting for their 360s, by the time they have enough, the Revolution will have been released and well, they'll lose interest for something better and cooler and this supposed strategy of Microsoft's just might bite them in the arse.

h0mi @ Jan 9th 2006 3:51PM

How did they expect to sell 3 million units if they didn't have 3 million available to sell?

Glenn Ford @ Jan 9th 2006 4:19PM

To #23

Wrong, it indeed was MS throwing out the 1 billion line during their E3 presentation.

Rock Howard @ Jan 9th 2006 6:08PM

Microsoft probably expected to move more units in Japan where the Xbox 360 sees little demand. Even with Dead or Alive 4, it'll remain a sore spot in their forecasts for the next few months.

kizza @ Jan 9th 2006 6:12PM

If they didn't have the consoles ready they shouldn't have played it up so much. I see lots of bitter fanboys having a go at Sony for overhyping, but M$ are no different, in fact, there worse. Why would they release so soon in Japan, & sell the machines cheaper than they sell them to there own people. If I was an american, I'd be disgusted with Bill Gay-tes craphouse company & attitude towards his fellow americans. He would have been better off, launching 1st in america & catering only there, then moving onto europe. I would then have released in australia & nz before japan, as even with our smaller population, he'd probably sell more here than Japan.

Least Sony are some kind of loyal to there own country first in these situations, even when they don't need to be, they could launch in america 1st, & yanks would be buying PS3's left, right & centre.

jopojelly @ Jan 9th 2006 6:46PM

to #15

all the girls I know have jiggily flesh....especially when i watch them fight in bikinis. And Japanese voices are a whole lot cooler anyway...at least in soul calibur II...

Bunky @ Jan 9th 2006 9:49PM

Something happened somewhere along the line that Microsoft is being mum about. I think they fully intended to make their goal but a problem came up that prevented it from happening.

superzapper2000 @ Jan 10th 2006 12:20AM

I have a relative who works for Sony Leeds in the UK and he's been told Sony is aiming for an August 06 launch for PS3 in the USA.

dsub @ Jan 10th 2006 2:52AM

#31...

I think your right. my guess is the overheating issues and stuff. After that they likely had to hault production, figure out the cause, come up with a solution, and start producing again. Which, in the case of the consumer is a good thing, because microsoft damn well knows it's better to sell 1.3 million consoles with some being defective instead of 3+ million consoles with a much larger number being defective. I'm glad they didn't ignore the problem just to meet demand.

Jon @ Jan 10th 2006 7:18AM

#23 what a dumb fanboy comment. Google first before making any comment. MS has in several cases made a plea to the media for '1 billion gamers'.

skyrous @ Jan 10th 2006 5:11PM

Well at the very least this puts to rest the theory that they were holding back 360's to generate hype and press coverage.

This setback cancels out a lot of the reasons they launched in 2005. The first couple million are the easiest to sell, early adopters and fanboys jump at them. But at this moment there are still 360 fanboys that do not have their system's.

You don't become #1 selling just to the fanboys. if you want to sell 30-50 million you need everybody else to buy your system and microsoft hasn't reached the point where they can begin to sell to those people.

And while the 360 is stuck in neutral the ps3 and the rev are preparing. Microsoft is squandering their headstart.