MS fails to meet 12 million mark
by Richard Mitchell 
{ Jul 6th 2007 at 2:30PM }
Microsoft announced at the beginning of this year that it had reduced its shipment goal for the fiscal year to 12 million units, down from 13-15 million units. Speaking to gamesindustry.biz about the new 360 warranty, Peter Moore has confirmed that Microsoft has missed the target of 12 million units. The company has sold roughly 11.6 million units, missing its goal by 400,000 units. Despite this, Moore states that Microsoft feels "really good" about the state of the Xbox. In particular, he emphasizes Microsoft's holiday lineup, and notes that it will be featured heavily at E3 next week.
Reader Comments (Page 1 of 1)
Joshua @ Jul 6th 2007 2:42PM
I'm sure that good feeling comes from knowing that Halo 3 is going to sell systems. The new warranty helps those on the fence a bit as well.
I doubt they are going to release the new 65nm system but I'm sure there are still a lot of folks waiting for that to happen. I wish they would release it prior to Halo 3. I'm just ready to buy another unit and I'm not planning on an purchase until they switch.
Also, I take it that the Chat board accessory will hit the news again come E3? I would hope that that accessory wouldn't be considered a big deal but I'm sure to them it is.
Intentless @ Jul 6th 2007 2:42PM
I don't think missing a goal by .4 is all that big a deal...
Vargas @ Jul 6th 2007 2:46PM
I think these missed target goals are a clear sign MS is overpriced. They will not be able to significantly expand their market share further without cutting the price. $400 bucks is still a lot of money for an entertainment device. If they match the rumored Sony drop of $100 bucks and drop the Core combined with the stellar fall software line up I think MS will soon be annoucing they are exceeding targets not missing them. A $300 dollar premium system and $380 dollar Elite would defintely move some kits, especially with the new warrenty.
If MS got really aggressive and matched Nintendo at $250 for the premium they might be able to knock out Sony completely. Don't see that happening though with a $1Billion dollar write down for the new warrenty.
Words to live by from the great John Wooden "If you don't have time to do it right the first time when will you have time to do it again" Or money to do it again in MS case.
Bravo6 @ Jul 6th 2007 2:55PM
The HW issues definitely hurt them lately.
Joshua @ Jul 6th 2007 2:56PM
It's a big deal when you are trying to make profit goals on a product that has just recently started to actually make a profit.
You can only bleed cash for so long. They need to hit those goals not only for profit but also for the investors.
Scott @ Jul 6th 2007 2:57PM
Drop the prices by $100 across the board and watch the 360 purchases soar with the combination of the Fall line-up.
Who Flang Poo @ Jul 6th 2007 3:05PM
I honestly think Microsoft will do fine just having the 3 year warrenty, this is because people wil feel more secure about their 360s and plus look at the fricken holiday line up, and Halo 3 the biggest fricken game ever, but if they really wanted to pound the snot of of the Gaystation 3 they could have price drops a month before Halo 3 hits stores then 360 will be killin Wii n Gaystation 3 by a lot.
Who Flang Poo @ Jul 6th 2007 3:09PM
I honestly think Microsoft will do fine just having the 3
year
warrenty, this is because people wil feel more secure about their
360s and plus look at their fricken holiday line up, and Halo 3 the
biggest fricken game ever, but if they really wanted to pound the
snot of of the Gaystation 3 they could have price drops a month
before Halo 3 hits stores then 360 will be killin Wii n Gaystation 3
by a lot.
Who Flang Poo @ Jul 6th 2007 3:13PM
Srry for the double post.
JohnMatZ @ Jul 6th 2007 3:24PM
Intentless wrote I don't think missing a goal by .4 is all that big a deal...
a minimum of 280 Million dollars (console + 5 games) in revenue is a huge deal. It would have made that 1.15 billion dollar charge off less of a hit.
I know they took the charge so that they can show Fiscal 2008 profitable on paper but I do hope they iron out the Hardware problems completely.
DjDATZ @ Jul 6th 2007 3:23PM
I dont think it matters that much...
I'm with the people here...drop the 360 price a month or a little bit more before Halo 3 is realeased, bundle in a/some good games, and you will see the 360 take off. And if for that price you can match the Wii's price with the premium...you're Gold. (Pun intended)
C'mon MS, take a couple more hits for us, and you WILL be rewarded.
DjDATZ @ Jul 6th 2007 3:24PM
Plus with them not being able to keep up with Elite demand in June, I think that hurt a bit, drop that price while the demand is still high, and the POS3 doesn't stand a chance.
Tony @ Jul 6th 2007 3:26PM
I definitely know a decent amount of people who are scared off due to the hardware issues. The warranty will help, but most important MS seems to be giving the impression that they've been fixing this in the newest units. We'll see how that goes.
I think it's really important to note that to a LOT of people -- despite things like Gears of War -- this system doesn't have an obvious killer app yet. It's gotten up to almost 12,000,000 without Halo 3 and GTA IV, which I don't think is much to scoff at.
What it really needs is something as ridiculously accessible as Wii Sports, because at this point it seems like the Wii is seen less as a multi-title system to a LOT of people, but instead as a device to play things like Wii Sports. It really speaks of the power of the game, I'd say.
360 doesn't really have anything like that. Clearly there's more family oriented games, but something like Viva Pinata is barely comparable and certainly more complex.
Personally, I think they should drop the core entirely, move the Premium down to that price and stuff in a game people would actually want.
Joshua @ Jul 6th 2007 3:35PM
I don't see my Wii as something to play Wii Sports on. I see it as something to play games from my childhood on.
And since that is about the only enjoyment I have with it I also see me trying to sell it currently.
They do need to market to people that aren't FPS fans or 'hardcore' or however you want to look at action game fans. They have more to gain by picking up the casual crowd than they do in Japan.
The problem is the casual crowd isn't going to buy a system at the current price. Offer a core for about $250 and you might see it happen.
aZTEKv2 @ Jul 6th 2007 3:42PM
In the mindset of investors and Microsoft, I would imagine that 400k is a significant loss considering their goal was readjusted to a more reasonable target. I'm sure jobs were at stake, etc etc but in order to maintain a competitive edge Moore has to release an optimistic statement to keep the ball rolling.
The commitment of extending the warranty to 3 years makes the price drop announcement less likely to occur, although as many have mentioned a price drop is a great incentive to those still contemplating on which system to purchase. Perhaps not a $100 price drop but a $50 sounds reasonable and justifiable for the core & premium SKU's. The Elite is still selling very well, selling at an avg of $490.00 +SH on eBay. The demand is definitely still there.
As great titles keep arriving (Eternal Sonata, GTA.IV, H3, just to name a few) the $charts will definitely see an increase.
The whole topic of Wii,PS3,360 pricing has been covered backwards and forwards but would like to add an experience I recently had.
I just purchased a Wii and the $250 tag is very misleading... after purchasing I realized that if I wanted to play Mario Party 8, Wii Sports, those type of games I needed to purchase additional controllers. @ $40 each = $120 + a classic controller to play the Virtual Console Games ($20) + an additional nunchuck for some games ($20) = $400 already spent on hardware.
*Also purchased a $15 HD cable to crisper images.
The Wii is a party game IMO and see those purchases as justifiable to get the full benefit of the system. So in closing, if the system were to drop to the nice $250 range for the core, when Mommy Mary goes to buy that Wii and sees its sold out, the 360 in stock for comfort :-p
PS3FANBOY/TROLL @ Jul 6th 2007 3:37PM
...
Richard @ Jul 6th 2007 3:43PM
take into account, if you think the 360 is overpriced, the apple tv is 300 bucks but it doesn't do half as much stuff as the 360.
Beaudry @ Jul 6th 2007 4:49PM
360 desperately needs a price cut now. If they dropped the price by $100, they would start flying of the shelves this summer. $400 is just a little too much.
Who Flang Poo @ Jul 6th 2007 4:15PM
Wow, im surprised the Sony defence force hasn't invaded this post yet with their bullshit and cry baby comments.
Murrytmds @ Jul 6th 2007 4:23PM
Sure they missed their target goal by .4 million.. when you dont consider that a couple million of those units 'sold' were returned as defective and then subsequently replaced with new units. at least 3 of that 11.6 mill are from me -_-
Mark @ Jul 6th 2007 4:24PM
http://www.vgchartz.com/ has them a 10 million. Who should I trust?
And as far as $400 is a lot... Own a home and a car and then $400 seems like nothing. At least once a year I spend over $400 on one of my cars in a single shot. That's not including payments, gas and insurance. The house is the same, but with a zero on the end.
$400 once every 4-5 years for entertainment is nothing in comparison.
Murrytmds @ Jul 7th 2007 4:00AM
heh and irony. I look at the news and they're talking about an estimated 2.5 million defective units so far. I guess MS missed the mark by about 2.9 million then.
ccc @ Jul 6th 2007 5:22PM
@3
The price is not that big of an issue right now. The price will drop eventually. SO they didnt sell 12 million no biggie. 11.6 million is still something like 10.1 million ahead of where they wanna be. And thats all that really matters to us,er, them. Not to mention that sometime after december I'll guess 360 sales will be around.....15 to 16 million. And thats pretty realistic. Thats 4.4 million more units sold with the release of GTA4, Halo 3, Mass Effect, Half Life Orange and the Holiday season.
@13=Tony
U know, Gears has sold over 2 million copies and has surpassed Halo 2 as the most played live game ever. U souldnt belittle GOW in any way shape or form. The franchise is here to stay and is 1 of the biggest things happening in the gamming world this day and age. The follow up to Gears will most likly be the best selling game of all time surpassing the records Halo 3 is about to set. If U wanna play something like Wii sports get a wii. Its a kool machine but its not to be taken seriously as competition to the 360. Unless 360 sales slow down because of it, and that will most likly never be the issue. ANyways, how about a game like Katamari? Or is that not " Family orientated enough" or "too complex" for u?
Dropping the core system is the only thing in your comment that I agree with. But then again, I said the very same thing about 4 months ago in another blog.
Dirk Dorkelson @ Jul 6th 2007 7:52PM
"Srry for the double post."
Maybe you should aplogize to gay people for lumping them in with the PS3, ya bigot.
Josh @ Jul 7th 2007 6:45PM
"heh and irony. I look at the news and they're talking about an estimated 2.5 million defective units so far. I guess MS missed the mark by about 2.9 million then."
No, when MS repairs a 360, they either repair your 360 or send out a refurbished unit. So they haven't missed by 2.5 million (which is, itself speculation about the failure rate). Do you honestly think that people just write off their 360s or buy a new one if theirs breaks?
graddy @ Jul 8th 2007 12:58PM
Im sick of people thinking Halo3 will sell 360's.
MS's whole problem is that almost everyone who has a 360 already is a hard core halo fan. All those people I knew who had an Xbox1 were planning on waiting to get a 360 on the arrival of halo3. They picked one up a year early for the likes of GOW.
MS is totally isolated in that the only crowd its pulling is the halo3 crowd.
jon @ Jul 19th 2007 4:48PM
I think the cost of the 360 is okay if you take in consideration inflation. However I am very disappointed with the games. Sorry to say this on fanboy’s website but the highest rated games seem to have quite a few short comings. Then add on top of that the freezing of games and ring of death on the Xbox and I can see why they don’t have the sales that were projected. While the system is a next generation system it’s not as big of a jump as some might have you think from Xbox. The whole game segment needs something new to really spark consumer interest. This is why WII is doing so good, yet I would never buy a WII because of the graphics. I am so tired of the run around shoot um up games that I have been playing since the beginning of 3d games on the pc. So I guess that leaves me begging the game makers to please think of something new…