Microsoft Lowers Xbox 360 Shipping Forecast (Again)

[fitbabits]

Hot on the heels of the very generous Xbox 360 warranty extension (http://www.evilavatar.com/forums/showthread.php?t=32397), Chris Liddell (Microsoft's Chief Financial Officer) announced during a conference call that Microsoft has lowered their shipping target from 12 million to 11.6 million.

Source - Next Generation (http://tinyurl.com/2babbt).

During a conference call addressing the Xbox 360 warranty extension, Microsoft CFO Chris Liddell said that the firm has updated its worldwide hardware shipment target from 12 million units to 11.6 million units for the fiscal year ended June 30, 2007.

He still remained upbeat, saying that the company is "happy with that number” in the context of the current industry environment.

Microsoft had originally planned to ship 13-15 million Xbox 360s during the fiscal year, but the company then downgraded that figure to the previous 12 million unit target, which Microsoft now expects to miss slightly.
Here's how they can make up the 400,000 - drop the price! If Sony can do it... (http://www.evilavatar.com/forums/showthread.php?t=32404)

[mkelehan]

I predict a $50 drop on all 360 SKUs, and a $50 drop on the HD-DVD drive.

[Vanthar]

I predict a $50 drop on all 360 SKUs, and a $50 drop on the HD-DVD drive.

I don't think they'll drop it because of that 1 billion they just dropped on the warranties.

[Zanzibar]

They really, really should drop the price to match Sony's.

[Kamalot]

Interesting. Nice to see a little realism come to bear on these forecast numbers. I wonder if Sony will ever revise their forecasts. I mean, weren't they supposed to have sold 4 million units before Jan 1?

[fitbabits]

They really, really should drop the price to match Sony's.
But the 360 is already cheaper than the PS3, even counting the thunderous drop coming at E3.

[Kamalot]

They really, really should drop the price to match Sony's.
In order to match Sony's price, they'd have to RAISE the price of the 360.

[Phades]

If they drop the price to $199 for the Core, $299 Premium, and $399 Elite that would be absolutely huge. We'd likely see a price drop on the Wii shortly after.

[JimmyDanger]

Oh this price drop will happen - and it won't be a long wait.

I'd say it's already planned. Ah - the glories of a new fiscal year.

And my source is - free market common sense.

3 year warranty - if screamed from the rooftops loud enough - should calm the whole RROD "buzz" - <$300 price should bring in more of the casuals...

What I'm unsure about is what their Wii-app is gonna be. Motion sensing Zune?
This will be an interesting E3 to be sure.

[JimmyDanger]

If they drop the price to $199 for the Core, $299 Premium, and $399 Elite that would be absolutely huge. We'd likely see a price drop on the Wii shortly after.

I'd drop the core altogether - Wii'd still drop to $199 if the 360 Premium became $299..

[Micasa]

Interesting. Nice to see a little realism come to bear on these forecast numbers. I wonder if Sony will ever revise their forecasts. I mean, weren't they supposed to have sold 4 million units before Jan 1?

They were supposed to ship 4 million units for the North American launch.

[H1PO]

fitty! you're back!
or have I just been spacing for the time you have been....?

[Kamalot]

They were supposed to ship 4 million units for the North American launch.
According to some places (http://www.vgchartz.com/), PS3 hasn't even sold 4 million units worldwide yet.

This Thread (http://forum.pcvsconsole.com/viewthread.php?tid=16280) is awesome. It compiled a bunch of analyst predictions on what the next (new) gen consoles would sell.

Here's a few of the short-term predictions:


Merrill Lynch (Worldwide Through 2008)
Xbox 360 - 47%
Sony PS3 - 33%
Nintendo Wii - 20%

IDG (U.S. Through 2008)
Xbox 360 - 15.5 million (43.3%)
Sony PS3 - 13.5 million (37.7%)
Nintendo Wii - 6.8 million (19.0%)
Total - 35.8 million

P.J. McNealy (Worldwide Through 2007)
Xbox 360 - 21 to 23 million
Sony PS3 - 13 to 16 million
Nintendo Wii - 12 to 14 million

IDC (Worldwide Through 2008)
Nintendo Wii - 32.1 million (37%)
Xbox 360 - 30.4 million (35%)
Sony PS3 - 24.5 million (28%)
Total - 87 million

[DaXIthR]

Chris Liddell (Microsoft's Chief Financial Officer) announced during a conference call that Microsoft has lowered their shipping target from 12 million to 11.6 million [for the fiscal year ending 30 June 2007].

I'm fairly certain you can't make a forecast for a passed date. This is MS BS.

[fitbabits]

fitty! you're back!
or have I just been spacing for the time you have been....?
No, I'm back.

Had a pretty crappy week so far, though. :(

[KingGorilla]

If it turns out that most Halo 3 fans already owned an Xbox 360 in anticipation, as many(myself included) have felt, how screwed is Microsoft at that point? We are only a few months away from the Wii being the most prolific console on the street and Nintendo has been raking in software sales on Wii and DS since Holiday.

[Zanzibar]

If it turns out that most Halo 3 fans already owned an Xbox 360 in anticipation, as many(myself included) have felt, how screwed is Microsoft at that point? We are only a few months away from the Wii being the most prolific console on the street and Nintendo has been raking in software sales on Wii and DS since Holiday.
There was a stat I saw that said that the majority of Halo 2 users playing online are still using original Xboxes. I think it was 65% or something like that. There's still plenty of people who haven't bought their X360s yet.

[Zanch]

A $100 price drop on all SKUs would be a big slap in Sony AND Nintendo's face. With news of Sony's price drop out of the bag, the big MS could use that as an opportunity to 1up them and announce a price drop at their own press conference. It would be certainly take all the wind out of Sony's sails, and MS has been pretty spot on about that kind of shit lately, so we'll see.

[torrefaction]

I'm fairly certain you can't make a forecast for a passed date. This is MS BS.

Someone doesn't understand how business finance work, and has never sat in on a investor conference call.


(Psst...that's you!)

[KingGorilla]

That is assuming that a large number of Halo 2 players will buy and play Halo 3. Counterstrike and Quake are examples where the sequel is less successful than the predecessor. Microsoft has a lot riding on Halo 3, a lot more than seems intelligent to me. Even Sony pictures was not counting on just Spiderman 3 this summer.

[fitbabits]

Even Sony pictures was not counting on just Spiderman 3 this summer.
You're right, Sony (the conglomerate) was also counting on robust sales of the PS3. Spider-Man saved their bacon for the time being.

Oh, and Mass Effect says hello. :)

[mkelehan]

I'd drop the core altogether - Wii'd still drop to $199 if the 360 Premium became $299..
I don't think that's true for this year. I mean, putting aside the fact that I don't believe the main 360 SKU would drop that low, even if it DID, Nintendo still can't keep these things on the shelves after 7 months.

[Yeti2005]

That is assuming that a large number of Halo 2 players will buy and play Halo 3. Counterstrike and Quake are examples where the sequel is less successful than the predecessor. Microsoft has a lot riding on Halo 3, a lot more than seems intelligent to me. Even Sony pictures was not counting on just Spiderman 3 this summer.

MS is betting big on Halo3 but they also have a mountain of other good games coming along side it so I think their bases are covered.

[bapenguin]

That is assuming that a large number of Halo 2 players will buy and play Halo 3. Counterstrike and Quake are examples where the sequel is less successful than the predecessor. Microsoft has a lot riding on Halo 3, a lot more than seems intelligent to me. Even Sony pictures was not counting on just Spiderman 3 this summer.

Considering the sales jump from Halo 1 to Halo 2, I think they are fairly confident Halo 3 will do as well if not better than 2 over it's lifetime.

[Atoyot]

Got the Red Ring of Death tonight when I turned it on. I bought the Best Buy extended warranty, so I called the store to see what I needed to do. Dolly was very helpful and said I could bring it in and exchange it. I asked her if she had stock and she asked me if it was the white one and then said yes. Turns out after getting to the store that they are out of stock and have been for days. Not only that, but all of the north part of Houston, Texas is out of stock. Could it be that Microsoft is having supply problems now that they found some hardware fixes? I wonder if they quit producing for a bit in order in implement the fix in the supply line which is leading to the stock problems? Best Buy said they should be getting a new shipment in on Sunday, but who knows if it will have any 360's on it. So I think the lowered forcast is due to this.

[RorschachCCCLX]

the ps3 price drop will open the flood gates, it might finaly start sony's surge over Microsoft.

[Shodan2020]

There's gonna be a price drop. I can pretty much guarantee it. Microsoft will match Sony move for move.

[Shodan2020]

Got the Red Ring of Death tonight when I turned it on. I bought the Best Buy extended warranty, so I called the store to see what I needed to do. Dolly was very helpful and said I could bring it in and exchange it. I asked her if she had stock and she asked me if it was the white one and then said yes. Turns out after getting to the store that they are out of stock and have been for days. Not only that, but all of the north part of Houston, Texas is out of stock. Could it be that Microsoft is having supply problems now that they found some hardware fixes? I wonder if they quit producing for a bit in order in implement the fix in the supply line which is leading to the stock problems? Best Buy said they should be getting a new shipment in on Sunday, but who knows if it will have any 360's on it. So I think the lowered forcast is due to this.

Make sure it's a PRO "white 360". I'd hate to exchange my Pro in on a warranty and get stuck with a Core (aka Tardbox ;) ).

[Kamalot]

the ps3 price drop will open the flood gates, it might finaly start sony's surge over Microsoft.
It might?

What if it doesn't start 'Sony's surge over Microsoft'?
What will it take to at least start catching up?

[oldjadedgamer]

the ps3 price drop will open the flood gates, it might finaly start sony's surge over Microsoft.

So the price "drops" to exact same price it was selling at launch 8 months ago and this is what will open the "flood gates"?

Why didn't the flood gates open when the PS3 was on store shelves for $500 last Christmas?

[Trazzlo the Magnificant]

the ps3 price drop will open the flood gates, it might finaly start sony's surge over Microsoft.
Well, let's take this in stages. First, it might finally start Sony's surge over the GameCube.

PS3 has many shortcomings that need to be addressed before floodgates open for it. More real stuff and less potential would be good.

[fitbabits]

Why didn't the flood gates open when the PS3 was on store shelves for $500 last Christmas?
Because of the comparatively weak feature set of the 20GB SKU. Of course.

[DeathtollWRX]

So the price "drops" to exact same price it was selling at launch 8 months ago and this is what will open the "flood gates"?

Why didn't the flood gates open when the PS3 was on store shelves for $500 last Christmas?


Because it didn't have a wireless function and it didn't have the chrome front cover. That's the ONLY REASON. really..

[Trazzlo the Magnificant]

Because it didn't have a wireless function and it didn't have the chrome front cover. That's the ONLY REASON. really..
Plus it sells for even less in Japan, and there was no open floodgate in their home country with that.

[Kamalot]

So the price "drops" to exact same price it was selling at launch 8 months ago and this is what will open the "flood gates"?

Why didn't the flood gates open when the PS3 was on store shelves for $500 last Christmas?
I got to agree with you there. Sony's already playing the $499 card. They did it months ago, then pulled the plug. You can't play that card twice and expect amazing results.

If Sony thought the PS3 was too expensive, they would have kept around the 20-Gig pack to stay price-competitive. But they were greedy, and WAY overconfident. Sony honestly believed people would buy the first 5-million PS3s on brand name alone. They honestly thought that people would work a second job because they wanted one so bad. Sony killed the 20-Gig pack because they honestly believed the PS3 was going to be a colossal success.

I'm really glad Sony is actually TRYING to do something to woo consumers instead of standing there in the store with his hands on his hips just WAITING for customers to come into his overpriced shop.

Honestly, I hope they sell a lot, even though I don't think they are worth the asking price of $499. Why? Cause the more they sell, the greater the chances of me getting super-spectacular games for mine, purely a greedy reason.

[BlackPete]

Hmm... in light of the recent announcement that they're fixing the RRoD issues (finally), and extending the warranty to 3 years... it definitely does seem likely that they're just not producing any units until after the fixes are done, and they start rolling out brand new fixed units.

This would also explain why I've been without my 360 for about a month now :( I was a bit surprised it was taking longer than usual going through the repair channels after all the stories I'd heard about how speedy it was.

[Vanthar]

Because of the comparatively weak feature set of the 20GB SKU. Of course.

I think it was actually because there were none. Sony manufactured VERY few of the 20gb SKU. The same thing happened in Japan. And the funny thing was that although the 20gb SKU is cheap in Japan, the 60gb is 'open sale' and retailers can charge whatever the fuck they want.

I think discounting the price drop because there was a 20gb SKU at the same price is a poor way to look at things. I don't necessarily think this will open the 'flood gates', but I do think Sony could easily double or triple sales (with them being so low right now) with this price drop.

[Vanthar]

I got to agree with you there. Sony's already playing the $499 card. They did it months ago, then pulled the plug. You can't play that card twice and expect amazing results.

If Sony thought the PS3 was too expensive, they would have kept around the 20-Gig pack to stay price-competitive. But they were greedy, and WAY overconfident. Sony honestly believed people would buy the first 5-million PS3s on brand name alone. They honestly thought that people would work a second job because they wanted one so bad. Sony killed the 20-Gig pack because they honestly believed the PS3 was going to be a colossal success.

I'm really glad Sony is actually TRYING to do something to woo consumers instead of standing there in the store with his hands on his hips just WAITING for customers to come into his overpriced shop.

I don't really think that you are in any position to know Sony's thinking behind their business decisions. I could easily say that they were losing more money on the 20gb and decided to discontinue after launch as a counterpoint to you believing purely in their arrogance. There are extremely arrogant people in the business world, but Sony ultimately has to answer to its board of directors and investors.

I think they knew the price of the blue laser would go down and they could cut costs in other places such as the custom PS2 chip so they killed the 20gb in order to drop the price of the 60gb sooner rather than later.

[Trazzlo the Magnificant]

I think discounting the price drop because there was a 20gb SKU at the same price is a poor way to look at things. I don't necessarily think this will open the 'flood gates', but I do think Sony could easily double or triple sales (with them being so low right now) with this price drop.
Well, if they did triple sales of the PS3 in Japan, it still would sell only half as many as the Wii. That just sort of puts the Wii's success into perspective, and how much of a fight it will be just to even up on sales, let alone catch up in total numbers sold.

[Wolvie]

Yeah... a three year extension of the warranty isn't enough. The systems been out for damn near two years, it's time for a big price cut to counter Sony's.

[oldjadedgamer]

I think that Peter Moore will use this to his advantage at his E3 speech right before he announces a price cut. I believe he will mention them missing their numbers because consumers have been saying that HD gaming is too expensive and they have spoken with their retail dollars. He will then say that the 360 priced at $399 is too expensive for the average consumer and at that point announce the 360 price cut.

This makes an excuse for them missing numbers, open up a chance to explain a price cut, and takes a jab at Sony since the PS3 with it's price drop is still more expensive then the 360.

Believe!

[Wolvie]

I think that Peter Moore will use this to his advantage at his E3 speech right before he announces a price cut. I believe he will mention them missing their numbers because consumers have been saying that HD gaming is too expensive and they have spoken with their retail dollars. He will then say that the 360 priced at $399 is too expensive for the average consumer and at that point announce the 360 price cut.

This makes an excuse for them missing numbers, open up a chance to explain a price cut, and takes a jab at Sony since the PS3 with it's price drop is still more expensive then the 360.

Believe!

If I didn't own a 360 I would hope your right. But hey, just for kicks, I still hope your right, people needs a new system man! Drop the price ya greedy hogs!

[Zanzibar]

I wonder if he'll have a tattoo that says '$360' next to a picture of an Elite.

[Exodus]

If MS announces a price cut that is as significant as the ps3's cut it will definitely push more 360s guaranteed.

[DaXIthR]

Someone doesn't understand how business finance work, and has never sat in on a investor conference call.

(Psst...that's you!)

Someone...you don't know what you're saying.

[JimmyDanger]

DaX - it's not worth worrying about man. You look pretty out of your depth there.

And I'm not going to explain the responsibilities of companies to their investors to budget, forecast and project profits and losses, and revisions that are made to forecasts, when at the end of stated financial period they fall below (or exceed) stated targets, so it can print up an accurate Annual report for it's investors.

You can go to business school and learn that for yourself.