Video game stocks down after reduced Xbox 360 targets

by Blake Snow { Jan 26th 2007 at 3:15PM }

After announcing record earnings yesterday in lieu of continued losses, Microsoft reduced expected 360 shipments from 13-15 million to 12 million "due to unsold inventories in stores." To paraphrase liberally, "Um, we're reducing our target shipments because we unloaded a slew of 360s on stores to meet our 10 million 'shipped' goal. We guess they aren't selling quite as well as we hoped."

But that's neither here nor there. The console is doing well. Still, publisher stocks dropped soon after the news today as most are expected to take an earnings hit via the reduced shipments in addition to the lackluster performance of the PS3. Said analyst PJ McNeally, "Video game publishers will be under pressure today after Microsoft cut its life-to-date shipment ... There is investor concern about a re-set of expectations around both the Xbox 360 and the Sony PlayStation 3."

As for Sony, they're planning to issue their financial report next Tuesday.

[via Game Daily]

Reader Comments (Page 1 of 2)

Crono @ Jan 26th 2007 3:22PM

I thought the 10 million seemed a bit too good to be true.

Turns out they were just overstocking all the retailers.

Matt @ Jan 26th 2007 3:23PM

Cue the fanboys

Arno @ Jan 26th 2007 3:30PM

OMG M$ lied to evreyone!!!1111111eleven

Shagittarius @ Jan 26th 2007 3:30PM

Going to be an entirely different landscape come Holidays '07. I think adoption rate will pick up for the 360 after its been out a couple years. Probably true for most consoles I'd bet.

Jake @ Jan 26th 2007 3:31PM

Was the "overstocking the retailers" angle just Joystiq editor opinion to get a flamewar going? Do hardware manufacturers get to choose how much stock a retailer takes on? Retailers put in orders based on what want. Could you imagine owning a store and having to stock whatever your suppliers said you did. That would be retarded.

I call shenanagins. 360 not selling quite as well as hoped. Yes, that is why the number has been reduced.

MS "overstocking" retailers to meet some arbitrary 10 million number to appease fanboys. No, that's ridiculous.

Grindstone @ Jan 26th 2007 3:32PM

Wow, a little bit of honesty now? This was unexpected.

Say, if they want to move more units and reach their 13-15 million units shipped (or sold -- which is it?), then they could always REDUCE THE PRICE! Geez, it's been out over a year now, show some love! Even $20 lower would be a nice gesture, albeit miniscule.

Daniel M. @ Jan 26th 2007 3:34PM

"Cue the fanboys"

Sadly, that pretty much applies to ANY post on Joystiq.

Unit @ Jan 26th 2007 3:35PM

this why it's hard to belive all these "numbers" console makers spew out. Touting you shipped 10mill doesn't mean a damn thing. It's how many that have sold compared to what you shipped. Why is it so hard to just give that info from the get-go? There's no need to sugar coat sh*t.

Dolla Dolla @ Jan 26th 2007 3:36PM

They can't ship 10 million if retailers don't buy all of them. The reason they are reducing shipping is because retailers have the stock and it isn't moving as fast as they want. So, naturally, they will wait until it moves before they order more. Same thing will probably happen to Sony since their stock isn't moving as fast, either.

Fhaze @ Jan 26th 2007 3:41PM

I sure hope Microsoft and Sony have learned their lessons. What is important to gamers is mini-games, a weather and news channel, and the opportunity to pay for games they have bought before on any console. Screw the entertainment center experience. What they should do now is start readying their next consoles. Just repackage the 360 and the PS3, add another stick of ram and totally redesign your controllers because they suck.

Or it could just be that shelling out $500+ a system is a little steep and people are taking a wait and see attitude to see which comes out on top.

silkylove @ Jan 26th 2007 3:43PM

In other news,

Nintendo staff members are currently using $100 bills to wipe their asses.

shaf2k @ Jan 26th 2007 3:44PM

lol a stick of ram

Shagittarius @ Jan 26th 2007 3:45PM

Things are really going to pick up for the 360 by Christmas '07. 2 years into its lifespan the console should be hitting its stride with quality software and be mainstream by that time.

BPM @ Jan 26th 2007 3:47PM

It's no surprise the 360 isn't selling as well as they'd like, it's still expensive compared to the last gen.

-$400 for the GOOD 360
-$40 for wired controllers, $50 for wireless
-$100 for a 20GB HDD
-$100 for the official wi-fi adapter
-$30 for a 64MB memory card
-$150 for the wireless steering wheel
-$60 for most games

It's a harder pill to swallow than for the PS2 or Xbox (where at most, each system costed $300, and games were $50 unless there was a special edition).

If you brought down the price on 360, games, and all accessories, I can assure you there'd be a bigger rush in sales.

The problem is the same for PS3. The high-end model of the PS3 costs twice what PS and PS2 did at their launches.
(A limited amount of good exclusives doesn't help its cause, either...)

Unless prices come down for both 360 and PS3, I do not see the current gen having as big of an install base as the last.

Wii's the only thing not making things more expensive. It's no surprise it's selling well (and would probably be doing better if Nintendo could move them faster). At most, games are $50 on Wii, with a couple of cheaper games here and there ($40 for Metal Slug Anthology is quite a steal!).
Even so, I think Wii prices could drop a bit. Especially the controllers. Say, $10 for the Nunchuk and Classic Controller attachments? I can understand the Remote going for $40, as the Wavebird was $30, and this is more than the Wavebird (Bluetooth instead of RF, rumble, tilt, speaker, and camera for pointing).
Would be nice if Virtual Console prices came down, too, since there are minimal changes to the games (a save state feature, and a digital manual).

It isn't just the upfront cost (console pricetag) that hurts a system's sales, but all additional costs (games and accessories).

rdj75 @ Jan 26th 2007 3:49PM

To #8

I understand where you are coming from but you have to also look at it like this; how many items that where shipped is what was sold to the retailer. It would be very difficult to determine exactly what was sold to the consumer because of theft inside of these retailers or even theft before it even makes it to the retailer or even simple eventory mistakes.

I had a friend of a friend that had 100 brand new psp's for sale(yes, 100), who knows where he got them from(stolen) but are they part of sony's shipped number? Yes. Are they part of what was officially sold to the consumer? No

observer @ Jan 26th 2007 3:49PM

"They can't ship 10 million if retailers don't buy all of them. The reason they are reducing shipping is because retailers have the stock and it isn't moving as fast as they want. So, naturally, they will wait until it moves before they order more. Same thing will probably happen to Sony since their stock isn't moving as fast, either."

Makes sense... in addition to the fact that the holiday rush (busiest time of year for consumers) is over. Everyone is still recovering from Christmas and the incentive that pushed a lot of people to buy one (gift giving)is over. It's still a solid console. The reduced numbers don't mean anything except that stores were overstocked for the holidays. Once more premiere games arrive (HALO 3) more units will move for sure.

Thomas Crymes @ Jan 26th 2007 3:50PM

Dolla Dolla has it exactly right.

What fantasy land to people live in where they think MS or any company can shovel units to a retailer and that retailer is just going to pay them because they asked.

Retailers buy units and sell them. When they get low on said units they order and pay for more. That is why shipped through numbers aren't as misleading a statistic as people want to make them out to be.

Corosato @ Jan 26th 2007 3:54PM

Aex @ Jan 26th 2007 3:57PM

And Fhaze wins the best satirical comment of the thread! Ziiiiinnngg!

Andrew @ Jan 26th 2007 3:59PM

I can't speak for anyone other than myself. I'm waiting, and willing, to buy either a 360 or a PS3, but I'm waiting for more than 1 or 2 good games to come out on each system. Mini games, online chat, photographs? Coudn't care less. I guess if I was 15 and wanted/needed this form of social circle, I could see backing one system and throwing stones at the other. But, I'm not. I want a console that will play great games. Perhaps while the soft sales of PS3, even 360, are due in part to high pricing, I think that there may be many, many people waiting for game publishers to do what they are supposed to do - make games that people want to play. I liken it to when DVD players first hit the market. People were very willing to spend many hundreds of dollars to buy early DVD players. Why? To watch movies on DVD. But, if all that was available were lousy movies, who would have bought the hardware? Stop ragging on Microsoft and Sony and publishers shouldn't blame them, either. Put out games people want and they'll buy the hardware on which to play them.

TRUTH @ Jan 26th 2007 3:59PM

@ BPM

You kidding right? Why you tack on all that shit.

PS3 doesn't even have a racing wheel yet you add it to the 360?

Frankie @ Jan 26th 2007 3:59PM

Notice how they didnt say anything about the Wii, lol.

Publishers wouldnt be in such a quandry if they invested more(rather than a few scraps here and there at the moment) or announced their intention to support it. This is what happens when you put all or most of your eggs in one basket. Their lost.

samfish @ Jan 26th 2007 4:01PM

haha- this thread is going to be friggin' awesome to read...

bgdc @ Jan 26th 2007 4:03PM

Where is the PS3? I keep hearing it's not selling well yet it isn't available at Best Buy.com or Amazon.com. WTF?

MoonfirePewPEwPEw @ Jan 26th 2007 4:10PM

"As for Sony, they're planning to issue their financial report next Tuesday. "

For those that own stock in the gaming industry, sell them now before Tuesday hit. I feel sorry for all the gaming publishers come Tuesday.

James @ Jan 26th 2007 4:17PM

Can we take an informal poll? How many Xbox 360 owners DO NOT own ANY of the following: A Live Subscription, Wi-Fi adapter, HD-DVD drive?

(I'm guessing less than 5%)

Unless you answered yes to the question above, you are a tool for saying an Xbox 360 costs anything less than $450 (Premium system + Live). An Xbox 360 costs $450 at the low end (core system is just pointless) and $750 if you fully trick it out to try and match the PS3 in terms of features.

So, let's all get this right: an Xbox 360 costs $450+ (depending).

Aex @ Jan 26th 2007 4:21PM

Speaking of stocks, I am curious as to the effect Sony's report on tuesday will have. The current trend is in Sony's favor. Since the release of the PS3 Sony stocks have risen nearly 10points.

Jake @ Jan 26th 2007 4:22PM

This thread has stayed surprisingly civil so far.

But seriously, the 360 is a lot of fun. I haven't had this much fun gaming since Ocarina of Time. Seriously. But, I didn't play much during the PS2 era - damn college with its always having parties, homework, and girls to do. No time for games.

The only reason I can come up with for the 360 to not be still sold out is that the majority of the human race is absolutely retarded.

But seriously, the 360 officially has enough quality games to warrant a purchase.

Vidikron @ Jan 26th 2007 4:22PM

@ James

What's your point?

aaron @ Jan 26th 2007 4:23PM

To bgdc:

It seems Best Buy focuses on improving stock in their stores before it goes online. Ever been to their stores more than a month after Christmas? Still pretty bare...specifically games.

Then there is perception. Many non-gamers (parents, mostly) think it's a waste of time calling and checking in-store stock (and usually it is). So, they just check online, and when it says sold out, they think it's sold out everywhere. "If Best Buy is sold out, no one has it!"...that's what Best Buy wants you to think. I've seen 6-7 60GB machines two weeks ago at a BB, so maybe YOU need to go to look for yourself.

MoonfirePewPEwPEw @ Jan 26th 2007 4:24PM

@26.

While we are at it, lets add the cost of a 1080p TV onto the 600 dollar PS3 (since you think we should have it all). That is another 1500-2500+ dollars, bringing it up to OVER $2,000 at least and at the highest, OVER $3,000. All the Wii needs is a 480p capable tv, which will net you no more than 300 dollars, which is still CHEAPER than the PS3 without its 1080p television.

See how easy it is to used biased perspectives to try to justify somethings worth like the PS3?

Zsavior @ Jan 26th 2007 4:25PM

You know what I hate about some of the repliers to joystiq post, if you try to talk about the actual facts the meat and potatos of these stories all you guys do is call those people baring news you don't want to hear fanboys. Everything can't be good news, everything can't be selling billions upon billions. You people need to see other news then what you want to hear.

Did anybody see mac world when jobs was showing the Iphone, and where they projected they would be at the end of the year? When he mentioned the console industry and how well and fast it was selling he practicaly crapped on it saying, "when you look at it, their growth really isn't that much at all." that is a freaking smack to the face. But all you console people want to hear is that consoles are OWNING gaming tearing the wall down. But really compared to other markets consoles are a joke, worst than that consoles are now not even living up to their own expectations in their own markets. Some how people don't see this as a problem, and if it is mentioned your a fanboy of another system.

These are the bleeding edge systems, that are not selling fast enough by the way. These are the systems Market anlayst said gamers wanted and would no dobutedly support to the death, yet they can't move their projected shippments. Just think about other industries that sell high priced gadgets, and watch how they dwarf game consoles and it is easy to see why people are worried about their market. Cell phones sell like gangbusters, Computer, PCs and Macs are killing. Even HD tvs are seeing a pick up in sales, but the high priced console sector some how isn't living up.

This means people will spend 300 bucks on an IPOD, but not on a game system, even though they may have an HDTV they are still not seeing the need for the game system. People are spending 400 bucks on a cell phone, once again they are leaving the game system in the store. What does this tell people, game systems have not penetrated the market as much sony and MS has been trying to say. To me that is news I want to hear about the game industry, even if it is not Nintendo sells one hojilion systems.

The fact is it seems the console makers this time around didn't do their homework. They didn't take in account that some just many not have the money to buy their precious systems. The second part I think they misunderstood was that the people that do have the money to buy their systems well, truthfully I don't think they took in account they might not want it. When gaming went from "I'll pick one up on the way home" to "Man maybe I will save up to get one in a month or two." you had to know their was going to be some backlash involved.

Martez @ Jan 26th 2007 4:25PM

I don't think BPM was adding all of those together. He never gave a combined price. He was just pointing out that all of them are a little overpriced. $150 for a wireless steering wheel? Pass. $100 for Wireless? Sheesh. $50 for a controller? The Wavebird's $30, and the 360 controller has no new functionality other than looking prettier.

The simple fact is that gaming in general is getting more expensive, too expensive for many less-than-hardcore gamers, and Nintendo (despite obviously being out for their own slice of the fat money cake and getting it) is the only one going easy on us with a cheaper system that's trying a different path. I'm still going to get a 360 (and likely many of the pricey accessories) because it is finally getting games I want to play, and probably a PS3 eventually too (gotta have MGS, and if Sony manages to hold onto that Soul Calibur exclusive, SC online will also rock). I think in general the adoption rate for consoles is going to be slower than previous years overall.

Which makes bickering over news items like this pointless :)

BTS.WRKNG @ Jan 26th 2007 4:27PM

Is anyone genuinely surprised to learn that Microsoft fudged the 10 million "sold" numbers? If so, were they born yesterday?

Vidikron @ Jan 26th 2007 4:31PM

@32

Different markets. I don't really see how the mobile phone market can even be compared to consoles.

Zsavior @ Jan 26th 2007 4:50PM

@ 35

I think I made it pretty clear, but consider this Jobs was making a point of which markets was the fast growing, between cell phones, game consoles, PC, macs. The game console was nowhere near the cell phone nor any other of the competitors on the graph. Why does this matter, it matters because they are competing agaisnt each other.

When you have 400 bucks to spend the simple question arises what do I spend it on. From the way the market is right now, people have no problem spending 400 dollars on an item. The problem is people find a problem spending 400 dollars on a game console. This article is about MS not moving their amount of ten million but shipping them, obviously people spent money, on techonological gadgets, IPOD sold, Macs sold, all with in their projected amounts. Yet Consoles can not meet what they said they would, while costing the same maybe less than same of the other gadgets.

So what I am saying is consoles and mobile phones, are in different markets but they are vying for the same consumers. And the consumers who have 400 dollars ready to dump on a new gadget are not turning to consoles, which means the high price has locked out many gamers, while not enticing any new buyers to the market. Game consoles are not swaying any body to their market. As the hype dies down I don't see people buying more consoles I see them definetly buying less, especially if it is a choice between an IPOD and a game console.

E.J. @ Jan 26th 2007 4:58PM

This is a result of non-hardcore gamers taking a wait-and-see approach to the Xbox 360 and Playstation 3. Many Joystiq readers still don't realize that plunking down 300 to 600 dollars for a console (no matter the features or lack thereof) is a very large investment. Another factor is that the stapled franchises for these consoles (Halo 3 and MGS/FF) haven't been released yet.

Money is not something you can throw around especially for a luxury item such as a video game console. People have to live somehow and they work for that hard-earned dollar. And, no, you don't need video games to live.

slacker164 @ Jan 26th 2007 5:00PM

@bgdc
“Where is the PS3? I keep hearing it's not selling well yet it isn't available at Best Buy.com or Amazon.com. WTF?”

If you’re looking for one, try ebgames.com. They have both PS3 models (20GB and 60GB) listed as in stock and shipping within 24hrs. No bundles or other BS either, just the regular price plus shipping.

JasonL @ Jan 26th 2007 5:06PM

Xbox 360 has more units sold than the competition by far right now. If I was a developer with a big budget game... I'm moving to the Xbox 360.

ivanv4 @ Jan 26th 2007 5:08PM

i think the industry is not going to have the grow of the last gen, unless somehow the wii can really keep up with the current games for everybody strategy.

i must admit i havent bought a 360 yet (yes i am an xbox owner) bc the price still a bit to steped for me right now for a console.

And with the current reports from publisher taking a hit in the current gen for expecting earning and the the wait and see for the wii, i kinda have an odd feeling.

Matt @ Jan 26th 2007 5:20PM

@32

When exactly was this golden age of "I'll pick one up on my way home"? I've been playing console games since the NES and they've never been at a price where I would consider them an impulse buy. I remember playing a demo CD on my PSX for months after I bought it because I had spent all the extra money I had just to get the console.

S @ Jan 26th 2007 5:20PM

@35 Games and phones both fall under the gadget category. There are 300 million americans at present. How many are too young or too old or too busy to give shit about Resistance/Gears/TP? How many need a cell phone regardless of age? Gaming is becoming a niche market because of price and creative direction. Otherwise it's still a gadget purchase.

I'm a father of two who is married to a CS/EE major who also loves video games so I am an exception to the rule. I should really be dropping all that cash on college funds for my boys but I guess I have some growing up to do also.

I guess what I am saying is that the professional who owns a 600 dollar phone is part of the pool of potential buyers of a 600 game because of cash flow but his perception of the game is exactly that: it's a game. You can't be too busy to own a cell phone or an IPOD because both don't require you "waste time". The phone might be viewed as a productivity tool and most fall under the affordable category.

Affording requires money AND time. The ones with enough time to justify a 1000 dollar investment probably don't have the money. The reverse holds true too. At $100 to $200 everyone can have one for the kids or those rare moments when they want to throw down in Madden or Mario Kart or GTA or just to say they have one.

Jeff @ Jan 26th 2007 5:22PM

'"We guess they aren't selling quite as well as we hoped."

But that's neither here nor there. The console is doing well.'

So the PS3 sits on shelves and it's doing poorly. The Xbox 360 sits on shelves and it's doing well.

What is with the continued double standard? The PS3 is selling better than the Xbox 360 did at the same stage of its lifespan; it would seem to me that the perceptions here are completely reversed. Or at the least, *both* systems are doing poorly, but the 360 is actually doing more poorly (remember, we're comparing the same periods in their respective lifespans).

The real winner is of course Nintendo. I'm convinced they're not selling as many systems as some people think, but at least they manage to sell all the systems they make. They're just not making as many as they thought they could. But since every system's profitable for them already, they really can't not be making the most money at the moment.

tryton @ Jan 26th 2007 5:47PM

yeah

BPM @ Jan 26th 2007 5:49PM

To Corosato and TRUTH (and thanks to Martez for pointing this out already):
Yes, I was just listing prices of accessories, not trying to make it a "total cost" as Sony fans like to do to make PS3 look cheaper than 360. Of course they're optional!

I didn't mention much in PS3 for two reasons:
1) Not much in terms of accessories (Okay, I do think $50 is too much for a SIXAXIS).
2) The original post was about 360 in the first place.

Though, you are incorrect about something, Martez. The 360 wireless controller, unlike the WaveBird, has rumble. Oh, and the guide button and player indicator LEDs, too.
But the controller prices are still crazy ($40 for the wired variety).

SuicideNInja @ Jan 26th 2007 5:50PM

"So, let's all get this right: an Xbox 360 costs $450+ (depending)."

Yeah, but it's actually useful for $450. You get what you pay for with challenging gamers online, ease of use, a solid GUI, and a fun way to personalize your online identity (gamercards).

If I had to assign a personal value to my PS3, it would be about $100. It isn't any fun, online multiplayer is drab, and the menus are frustrating. Great...I have Linux...with no GPU support (read: it's worthless). Wireless? No good for online gaming. The card readers aren't doing much for me either. And that damned controller keeps disconnecting...(causing major frustration in RFOM)

Ask anyone who pays for Live...the $5 a month is worth it.

Sure, the PSN tries to emulate some of the features, but overall it just not cohesive. It's more work than play, which is the point, right?

fox619_master @ Jan 26th 2007 6:17PM

lol Arno !!!1111eleven lol

AG @ Jan 26th 2007 6:22PM

@SuicideNInja

You say you own a PS3, but yet in every post I see all you have to say is negative after negative about the PS3. Why did you buy it then? Or do you even own one? You sound like a disgruntled Xbox 360 fanboy.

Clearly you must have a reason you dropped
500 or 600 dollars on it?

If you give it about a month or two you will have plenty to play. Much more to play if you compare it to the same timeframe when the Xbox 360 launched.

awiifemale @ Jan 26th 2007 6:34PM

I guess I'm one of the 5% that doesn't have wi-fi going with my 360 (too expensive and no real interest in getting online). Don't have any reason for an HD player of any kind either.

I actually did hook up the Wii wi-fi just to see what it was like (and it was free). I have no interest in VC games or surfing the net on it though. The weather channel has nice elevator music lol.

The 360 is a good console, but if it has upgrades coming, it's going to make me wish I had waited to buy it... I won't buy another one. Other people might now be waiting for the newer and better version to come out instead of purchasing now.

Sri Lumpa @ Jan 26th 2007 6:55PM

"After announcing record earnings yesterday in lieu of continued losses,"

Hmm, you made a mistake here Blake, you don't announce earnings instead of a loss, you announce earnings as either a profit or a loss, and their earnings are no record as they are similar to last year's earnings.

It is their revenue that is a record although it is a good sign that the loss is similar for much bigger revenues than last year as it means they are losing less per dollar invested and thus are closer to profitability.

As it is that first sentence does not make any sense.

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