Well, between the months of January and March Xbone actually did not out-ship 360...so...there is that.
-
Hey Guest. Check out your NeoGAF Wrapped 2025 results here!
MS CFO: Manufacture of Xbox Consoles may slow down or stop...
- Thread starter Miles Quaritch
- Start date
Well, between the months of January and March Xbone actually did not out-ship 360...so...there is that.
Dr. Kitty Muffins
Member
Even if Microsoft drops Kinect, it would take awhile to get those units to retail if they intend on selling through existing stock first. If you stick those Kinect less Xbox One units next to the current Kinect enabled Xbox One overstock, you may never move the old consoles. Only the new Kinect less units would sell.
AstroNut325
Member
Here's a pretty good article discussing another important reason why excess inventory is bad:
http://www.fool.com/investing/general/2012/03/23/apple-lesson-of-the-day-inventory-is-evil.aspx
There's lots more in the full article with charts and graphs comparing companies in computing and mobile hardware manage inventory. Pretty interesting stuff.
TLR: Basically, in addition to all the other obvious liabilities to having excess inventory that degrade unit profit, (additional warehousing and transportation cost, tax liabilities, ect) a huge problem is the obvious, but often overlooked, risk carried that the longer a unit resides in inventory, the more and more likely it is that that unit will lose value. The most successful electronics firms reduce this risk, the ones that fail often write down huge losses.
...
So if Microsoft isn't selling Xbones as fast as they estimated, this is a really smart move. Sure, they need to sell more, but that's not the problem of the supply chain guys. That's for marketing to worry about. Make some more games or something. The supply chain folks need to do their job to insure Microsoft and its investors aren't left holding the bag, and that's precisely what they are doing and it's absolutely correct to do so.
WHOA. Thank you for this. I find stuff about supply chain management intriguing.
It certainly has shipped more. But that seems to be the problem.
Yeah Pro Evo was eating into Fifa's dominance year by year (to the point where EA moved their release date from mid October to September), then HD happened and EA pulled their finger out of their ass while Konami, LOL, Japan, LOL, HD, LOL.
SHADES
Member
We all seem pretty keen to use X360 numbers and I'd imagine MS would have been also, so that's what? 80m units in what 80-90 months?
We know MS have mentioned they have ample inventory & have sold to retailers 5.1m XB1's in a 6month period so I don't think it's hard to imagine between those variables MS are/were contracting Pegatron to a million a month assembly.
Like you say, we don't know what MS have manufactured to date but one can have a pretty decent guess.
speculawyer
Member
C'mon MS. Give me a $399 deal with one game and I'll jump in.
And do it soon or I'll add a free year of xbox live as a requirement.
And do it soon or I'll add a free year of xbox live as a requirement.
How about $449 with a free set of steak knives? VALUE!
SenjutsuSage
Banned
Nope, wrong again. I can also say the Xbox One is outselling the Xbox 360 with certainty, not just outshipping. We have NPD numbers that show the Xbox One is easily outselling the Xbox 360, as in many more are being sold to customers than was the case for the 360 during the same point in time.
The Xbox One in the USA has already sold close to 70% or more of the Xbox 360 LTD for the USA as of November 2006, when Gears of War launched. The Xbox One is already 70% of the way there 5 months in, and you say we don't have any evidence it's beating the 360? But, wait, why am I even telling you things you already know despite still saying the opposite for some bizarre reason? Surely you have seen the NPD threads, right? Surely you see the Xbox One easily outpacing the 360's numbers in its strongest market? Of course you have.
And Microsoft has simply done with the Xbox One that which you yourself suggested was the key thing to do, which is to resupply and start getting consoles on shelves for the masses. Sales still appear strong, supply isn't an issue, and obviously they have more than satisfied non-day 1 preorders.
Do you now have a different opinion? Beyond that, I wonder if people even realize how silly it is to imply a system that is basically $100 more expensive, and that has also sold a combined average of 90% of the PS4's own sales in the last 2 months in the USA (March and February), is somehow demonstrating poor sales...
For March the XB1 sold 311k to the PS4's 370k - 84% of PS4 sales
For February the XB1 sold 258k to the PS4's 268k - 96% of PS4 sales give or take.
90% average.
http://www.neogaf.com/forum/showpost.php?p=104304990&postcount=2018
If you toss in the very alarming January for the XB0, where it was about 50% of the PS4's sales, then that would bring the average down to 76% of PS4 sales in the last 3 months in the USA, still quite good. And yet people are still clinging to the idea that the 360 is either beating or on par with the XB1? Jesus lol.
How about the fact that the Xbox One sales are extremely front-loaded and only about 1.2m units have been shipped (not even sold!) this year, and that's actually a slower pace than the 360, and that's with the 360 being severely supply constrained?
Also, outdoing a supply constrained console isn't a huge deal, anyway.
Uno Venova
Banned
shipping less than a supply constrained console that was a sequel to the original Xbox says a lot.
jhmtehgamr20xx
Banned
When I saw Dec. NPD and the massive dropoff for PS3 vs. 360 doing pretty damn well, I felt this line of thinking, too.
Somebody needs to spill the split of TF sales btwn XBO and 360 by now >:S
The Sage knows these points pretty well by now, but in his mystical wisdom of evolved consciousness, renders them as mere incidentals not even worth the entertainment of consideration, in his awesome arguments.
And it's only going to get worse further & further.
Hawk269
Member
Your basing this on what??? Xbox 360's with Kinect and without Kinect each sold. Some people wanted Kinect when purchasing a system, so they chose the one with Kinect.
You have no basis for saying such non-sense.
Sublyminal
Neo Member
Depends are they Ginsu or just your regular walmart variety?
Did 360 got bundle free game and major discounts from jan to march?
I find it funny how even a supply constraint 360 out shipped xb1 jan-March . Add to the fact that xb1 already got a discount/ price cuts/ free games.
the most funny part it's all compare to 360 which with 1 year head start still ended up in last place.
And please let's stop bragging about 100$ More console blah blah blah. It came with free games and was heavily discounted
Yeah! Don't let that stupid god damn "reality" bullshit poison your mind!
Dr. Kitty Muffins
Member
No basis? This entire thread is a basis. If the demand was there was Kinect, the Xbox One wouldn't be in the situation it is in now. No way a 500 dollar Xbox One sells more than a 400 dollar Xbox One without the gimmick.
Judging by the amount of Xbones with Kinect sitting on shelves not being sold, I'd disagree. And if there was a Xbone minus Kinect on offer right next to them for a much lower price I can guess which one would sell and which wouldn't.
SHADES
Member
I think what's obviously more noticeable this time round is that the X360 whilst supply constrain albeit didn't start to curtail quite so soon. We can all argue that it's doing X amount of successful numbers but nowhere in MS's 3 console lifespan have they offered a AAA title as a free pack-in or dropped the price of said bundles in its key markets so soon into its lifespan.
We can all make arguments that support which ever stance we choose based on whatever choice we chose to overlook but the sheer fact that MS themselves are trying shift units at cost in key markets speaks volumes towards their expectations/stock/satisfaction regarding launch.
Take the Titanfall launch, if anything that should of been XB1's prime number, it's best/highest RRP since launch, it's golden ticket! If the XB1 was doing as well as you suggest then why in gods name have they packed-in MS's "ace up their sleeve" and knocked £80 (£130 if you include Titanfall's RRP) of the recommended retail price? For goodwill? Hey because it's MS & we just love our fans?
No because it's not doing anywhere near the number they forecasted and anyone with any common sense can see that, and are most probably waiting for the next price cut before they dive in, but I do admire your passion for said product Good sir.
Since when was the Xbox One $500 in the UK and US in the months of February and March?
Its no coincidence that sales erupted with the price cut to $450, retailer gift cards, free Xbox Live, and free Titanfall/Forza. Or did Sage forget about the billion threads about Xbox One deals from big box retailers?
Shit, the Xbox One was delivering MORE value if you include the cost of Titanfall with the bundles. And it STILL got outsold by the PS4. This isn't a $500 console getting outsold, its a $450 console that came with a $50/60 game as well as gift cards or Xbox Live if you were lucky. In Australia, the Titanfall bundle is practically $150 cheaper than the PS4 and I doubt it severely outsold the PS4, if at all now the PS4 is readily in stock.
It always happens, he argues a point that doesn't actually exist or uses conditions in such a way that he cannot ever be proven wrong.
Its no coincidence that sales erupted with the price cut to $450, retailer gift cards, free Xbox Live, and free Titanfall/Forza. Or did Sage forget about the billion threads about Xbox One deals from big box retailers?
Shit, the Xbox One was delivering MORE value if you include the cost of Titanfall with the bundles. And it STILL got outsold by the PS4. This isn't a $500 console getting outsold, its a $450 console that came with a $50/60 game as well as gift cards or Xbox Live if you were lucky. In Australia, the Titanfall bundle is practically $150 cheaper than the PS4 and I doubt it severely outsold the PS4, if at all now the PS4 is readily in stock.
It always happens, he argues a point that doesn't actually exist or uses conditions in such a way that he cannot ever be proven wrong.
Here's the thing about Xbox 360 comparisons. Xbox 360 was NOT sitting on shelves waiting to be bought in April of its launch year was it? What was sold was what was shipped. That's the major difference here. We have shipped numbers and they're tracking ahead of 360 shipped numbers, but how are the SOLD to CONSUMERS numbers tracking?
Crimson_Gold
Member
That question won't be answered anytime soon. From a PR standpoint it would be a disaster. From a business perspective, it is not information that most need to be made privy of. If it were close to selling at the rate it was shipping, I believe they would at least state that they are selling as many XOnes as they produce. However, there's more than enough anecdotal evidence to prove that is not the case.
E3 should be fun this year
SHADES
Member
Exactly! And it was by no way packing in a free game that I might add was its most hyped/marketed game and also had deals knocking in some case £130 of its RRP, not in the April proceeding it's launch it didn't.
The signs are there for all to see and MS isn't even hiding it, they know, we know, they know that we know, only those blinded by sheer loyalty refuse to see it for what it is.
Oop, my mistake. Forgot XB beat GC. 2nd, 3rd, and probably 2nd again.
Point being though, no 3rd console curse.
Suikoguy
I whinny my fervor lowly, for his length is not as great as those of the Hylian war stallions
This sounds like MS is unwilling to drop the price and take more of a loss.
Which, if true, implies that MS is willing to give Sony quite the lead, in part so they can keep Kinnect, and secondly because they are satisfied with the way it's going and being behind does not impact their long term plans or they don't have the support to take the losses required.
A more lopsided console cycle will lead to a few side effects.
Some positives for gamers;
1.) A fair bit easier ability for Sony to secure 3rd party exclusives. Focus on one platform tends to allow for better games.
2.) PS4 being the lead platform for multiplatform titles, which this gen is advantage since the PS4 has a clear power advantage.
However, it's not all rosy;
3.) The PS4 will remain at higher price longer. Price decreases will more depend on sales slowing down.
4.) PSN+ may become a bit less competitive.
Regardless if the title is clickbait, you don't talk about "channel inventory drawdown" when your competitor still can't keep anything in stores.
On the other hand, could also mean they plan to attempt to empty the channel because they are dropping Kinnect.
Which, if true, implies that MS is willing to give Sony quite the lead, in part so they can keep Kinnect, and secondly because they are satisfied with the way it's going and being behind does not impact their long term plans or they don't have the support to take the losses required.
A more lopsided console cycle will lead to a few side effects.
Some positives for gamers;
1.) A fair bit easier ability for Sony to secure 3rd party exclusives. Focus on one platform tends to allow for better games.
2.) PS4 being the lead platform for multiplatform titles, which this gen is advantage since the PS4 has a clear power advantage.
However, it's not all rosy;
3.) The PS4 will remain at higher price longer. Price decreases will more depend on sales slowing down.
4.) PSN+ may become a bit less competitive.
Regardless if the title is clickbait, you don't talk about "channel inventory drawdown" when your competitor still can't keep anything in stores.
On the other hand, could also mean they plan to attempt to empty the channel because they are dropping Kinnect.
SHADES
Member
But they've already dropped the price here, the Titanfall bundle today here in the UK (key MS ground) is £80 cheaper than the solus XB1 at launch 6 months ago & £130 if you actually include the Titanfall RRP, that to me says MS are willing to drop the price & are possibly taking a loss already based on what Yusef Medhi said pre launch, stating that MS would either break even or might even make a slight profit on XB1 at launch.
Suikoguy
I whinny my fervor lowly, for his length is not as great as those of the Hylian war stallions
Those had to be MS sponsored retailer incentives. The margin on console sales is basically nothing. So they were meant to appease retailers who just had too many consoles.
The question is, whether it's to narrow inventory due to lack of expected sales, or to clear inventory to launch without Kinnect. I'm leaning towards it being lack of expected sales. Many US stores resumed the higher price point, the next few weeks should be interesting, if not telling.
SHADES
Member
But even if we had the numbers at the same stages the market conditions and variables such as pack-ins, price drops wouldn't really tell the full picture. It might well be matching X360 numbers but the X360 didn't require the free game or price reduction so early in its life cycle and that's the point.
I know all of the qualifiers of each side of the argument but without numbers attached to them it feels like we are spinning our wheels a bit here.
If they keep waiting for the right time to lower the price (giving the system a real price drop), they'll forfeit NA to Sony, as people will get tired of waiting for Microsoft to do so.
That's really going to hurt Microsoft a lot later on (probably even more so than in the Original Xbox days), especially when Sony already has worldwide.
Disaster Nebraska
Banned
Reposting from earlier in the thread, because all of this "X1 is fine. It's selling better than 360 (or PS1 or PS2 or whatever) and THOSE consoles weren't a flop amirite?" nonsense is getting just silly.
SHADES
Member
Not for me it doesn't, I'm pretty confident MS wouldn't be making such discounts had the XB1 been matching their expectations. But the numbers can't hurt either argument. I'd also be interested in seeing when the first X360 price cut or pack in game into play in its life cycle.
Possibly, If it were one or two retailers then I'd be inclined to agree, but here it's every retailer across the board and I'm pretty sure target and best buy had equivalent deals also, not sure about the rest as it's not my home turf, I'll gladly be corrected though if I'm wrong.
BigSpleenRupture
Banned
Keep ignoring that now manufacturing ability is way higher thus better FRONT LOADED sales, 360 would have sold a lot more had it not been so.
Keep ignoring how x1 is now tracing quite a ways behind 360 for the last 3 months and that will get worse. What will yur excuse be when x1 falls beind 360's pace and further bshind ps4?
3rdamention
Member
Well brother, I tried to look it up. According to this site (I don't know how true, but I am sure others could find better data if they don't believe this site, its not like this is info that would be fudged), I found this:
Xbox 360 Launched on November 22, 2005 for the price of $399, Core Package $299.
In April 2007, Microsoft announced the 120GB Elite Model for $479.
The following August of 2007, was the first price cut. $279 on Core (-$20), $349 on 20GB (-$50), $449 on 120GB (-$20)
So it looks like the price cut came approx. 3 months short of 2 years after launch. Of course, they were the cheaper system (compared to PS3) and had a 1 year head start on the PS3, so that can be factored in to the time that past for a price drop.
As for the first time they packed in a free game, I couldn't find anything.
Liabe Brave
Member
While their revenue is up, their margins are down. Last year Q3 profit was $393m, this year $258. So 34% lower profits on 41% higher revenue.
You're right about what drawdown means. What you're missing is that this statement indicates more than just lower shipments. In order to reduce channel inventory, they can't simply ship less this quarter; they have to ship less than retailers sell. Given that, as she and you said, sales are historically lighter this quarter, then they have to ship a lot less than this past quarter.
Yes, that's entirely possible. But that will incur costs, to store the overstock. This is why people have been assuming that production will be decreased. I don't have specific knowledge about this field, but it seems that lowering production might also incur costs. So I'm agnostic about whether production would reduce, or they'd just store the surplus.
Cthulhu_Steev
Member
Well it appears to be settling a little now, it'll probably be fine by the summer but who know what's going to happen for its second thanksgiving, black friday and christmas season?
Or maybe xbone takes the throne back and it becomes the year of the blue-brick wall in shops.
It appears many people in this thread have just as good an understanding of the numbers as you, but you keep multiplying yours by 'hope' so you're coming out with better results for MS.
Memorabilia
Member
The numbers and projections speak for themselves, but now we have official, public statements that prove sales have come nowhere close to what MS originally hoped as borne out by massive over-stock. There seems to be a fair amount of wishful thinking and spin going on in this thread but the bottom line is Don Mattrick screwed the pooch and this is the real-world fallout: a generation of 2nd place.
No, its not the end of the world as the system will still be fun for those of us who have an Xbone...but its still a bit of a head-scratcher as to exactly why things needed to go this way. Could the explanation really be as simple as greed? After Allard's group guided the 360 to a comfortable lead by building a massive following and nurturing a relationship with gamers over a number of years this new group of yahoos comes in and pisses it away in a matter of minutes at E3 by unleashing a new system/ecosystem that feels far less gamer/consumer friendly. After that, many of us were shouting from the roof-tops the shit had hit the fan...but what is still baffling is that no one with any juice inside MS seemed willing or able to steer the ship more rapidly in the right direction. Obviously the people who forced Mattrick out saw trouble brewing, but they just kept paddling towards the water-fall with shit-eating grins on their faces pretending everything would be honkey dory.
I'm sure I'm not alone when I say this is one time I'm not happy to be right. This whole mess weakens a brand that so many of us supported and loved during the 360's hey-day. If theres a silver lining, being humbled by how badly they fucked up the PS3 forced Sony to bring their A-game. So, we can hope MS does the same and makes some big moves (they can start by puting some value back into XBL and doing something, anything with kinect so it doesnt feel so fucking useless...).
No, its not the end of the world as the system will still be fun for those of us who have an Xbone...but its still a bit of a head-scratcher as to exactly why things needed to go this way. Could the explanation really be as simple as greed? After Allard's group guided the 360 to a comfortable lead by building a massive following and nurturing a relationship with gamers over a number of years this new group of yahoos comes in and pisses it away in a matter of minutes at E3 by unleashing a new system/ecosystem that feels far less gamer/consumer friendly. After that, many of us were shouting from the roof-tops the shit had hit the fan...but what is still baffling is that no one with any juice inside MS seemed willing or able to steer the ship more rapidly in the right direction. Obviously the people who forced Mattrick out saw trouble brewing, but they just kept paddling towards the water-fall with shit-eating grins on their faces pretending everything would be honkey dory.
I'm sure I'm not alone when I say this is one time I'm not happy to be right. This whole mess weakens a brand that so many of us supported and loved during the 360's hey-day. If theres a silver lining, being humbled by how badly they fucked up the PS3 forced Sony to bring their A-game. So, we can hope MS does the same and makes some big moves (they can start by puting some value back into XBL and doing something, anything with kinect so it doesnt feel so fucking useless...).
SHADES
Member
Thanks dude, that definitely tells a different story than were seeing today, hence why I don't believe that the XB1/X360 comparisons are anything other than marketing BS.
It's a comparison MS themselves made as it paints the best possible picture but doesn't factor in the variables. It's never a good idea to just wallpaper over the cracks.
Nydius
Member
I just realized what your posts make me think of.
I really can't wait to see how much you try to spin the numbers over the next two months when Microsoft has literally nothing lined up to drive sales of the XBO. They were banking on Titanfall to carry them through to E3 where they could try to build hype, yet Titanfall didn't even give them first place in its release month. Now that it's out for X360 and is a solid port - albeit with a dev that's slow to update - Titanfall X360 is cannibalizing any remaining XBO sales it may have pushed.
The "killer apps" of last gen - Gears and Halo (and to a lesser degree, Fable) - aren't even going to show up until 2015... About a year and a half too late. The rest XBO's 2014 game lineup are inferior multiplats or niche exclusives.
Regardless, spin baby spin. It's entertaining to watch. I'm sure you'll try spinning some tale about how Sunset Overdrive, Project Spark, and Quantum Break will sell enough XBOs to close the PS4 gap.
lifeexpectancy
Member
You'd just need Warehouse 13. It would house them all sufficiently, and the artefacts would increase their power, making each XB1 as powerful as 3 launch XB1s.
Edit: After reading the above posts, I will say that I'm pleasantly surprised by Project Spark. Hopefully the laggyness and stuttery-ness of the game is something that will be ironed out during the Beta before the full-fledged release, but it's pretty amazing to see some of the things people have come up with in that thing. I just wish I had the time to learn to use it to its full potential and create something spectacular.
Unfortunately, I don't see it selling units. Its a niche title for would-be developers, or maybe real developers wanting to fiddle with something different. It's not something that will be very mainstream though.... then again I guess anything can happen. Look at Minecraft, after all.
But yeah, anyone expecting big numbers from XB1 for the rest of this year is pretty much off his/her meds.
TacticalFox88
Banned
Remember when Microsoft said they expected at BARE MINIMUM 100 million XB1s sold LTD?
Remember when Microsoft said they expected at BARE MINIMUM 100 million XB1s sold LTD?
They will now start talking about that as "Xbox Family".
Remember when Microsoft said they expected at BARE MINIMUM 100 million XB1s sold LTD?
I have a better Microsoft quote that will be even more amusing in hindsight!
"History has shown us that the first company to reach 10 million in console sales wins the generation battle." - Don Mattrick, 2008
What's quite interesting is the balance between retailer discounts offered by Microsoft, the cost of storage of produced XB1's and the increase in cost per unit when reducing a production contract, as well as a potential buy out of a production contract, that's likely 12 months to August. We've no Idea which of these costs would the easiest for Microsoft to accept and/or mitigate.