Microsoft's Xbox 360 Blunder

january 14, 2006

I admit, Microsoft did a great job hyping up the Xbox 360. Unfortunately, they did not have enough production to back up that hype. Now that the holiday season is over, we are seeing the results of this blunder. By announcing the game console early and creating a whole bubble of hype around it, Microsoft has truly shot themselves in the foot. First, people stopped buying games for the original Xbox. I am sure publishers are not so happy about that.  Second, Microsoft wasn't able to get Xbox 360s into the hands of gamers who budgeted for the console -- this cancels out Microsoft's "advantage" of an earlier launch than Sony and Nintendo.  As the launch of the PS3 and Revolution loom, gamers will now hold onto that pot of money and wait for the other two consoles to be released, then decide on which to get.

Microsoft sold just 600,000 Xbox 360s in the United States in the last six weeks of the year, Frazier said, compared with 1.4 million units sold when the Xbox made its debut in 2001. Michael Pachter, an industry analyst at Wedbush Morgan, estimated that Microsoft sold an additional 300,000 Xbox 360s in Europe and only 100,000 in Japan.
If that does not ring as a dud of a launch, I don't know what does.