360 Shipment Forecast Cut
Not only PS3s went unsold over Xmas - now Microsoft cries "over-stock"
So, it’s not just Sony with unsold consoles sitting on shelves… Microsoft has cut its 360 sales forecasts for the fiscal year ending June 30th 2007 - claiming unsold inventory currently still in channels.
Chief Financial Officer for Microsoft, Chris Liddell, said the company is now forecasting global sales for the next year of 12-million units. Previously it was predicting sales of 13-million to 15-million.
Taking Microsoft's highest previous figure of 15-million units, that's a 20% drop in the forecast.
Microsoft has also cut forecasts for its Entertainment Division (including the underwhelming, Zune) as a whole from a 33%-44% rise to a 26%-31% rise. It hopes to offset the lower-than-expected 360 sales with increased sales of its premium Vista package.
Unsold Xbox 360 inventory sitting in stores is being blamed for the cut in the forecast, with Microsoft saying that it wants to ensure its games division turns a profit. Liddell told Reuters:
Liddell's statement begs a couple of questions; if the company always knew it was going to be a slow half to the fiscal year, why were its forecasts 20% out? And if the first half was so good, why is inventory sitting on shelves?
That said, Microsoft seeing a profit for its games division is ambitious in itself. The only time it's ever turned an operating profit was during the 2004 financial quarter in which Halo 2 was released.
Generally if a division fails to turn a profit at Microsoft it gets cut. It also means shareholders are no doubt getting miffed about a division that could be perceived as dead weight. The Xbox's continued existence is testament to Microsoft's desire to own the living room.
This ‘Media Center’ strategy is based on Vista, and according to the company will create:
For more on Vista today click here.
Chief Financial Officer for Microsoft, Chris Liddell, said the company is now forecasting global sales for the next year of 12-million units. Previously it was predicting sales of 13-million to 15-million.
Taking Microsoft's highest previous figure of 15-million units, that's a 20% drop in the forecast.
Microsoft has also cut forecasts for its Entertainment Division (including the underwhelming, Zune) as a whole from a 33%-44% rise to a 26%-31% rise. It hopes to offset the lower-than-expected 360 sales with increased sales of its premium Vista package.
Unsold Xbox 360 inventory sitting in stores is being blamed for the cut in the forecast, with Microsoft saying that it wants to ensure its games division turns a profit. Liddell told Reuters:
"We are just being cautious about the second half. It was always going to be a slow half. We've done very well in the first half. There is a reasonable amount of inventory in the channel."
Liddell's statement begs a couple of questions; if the company always knew it was going to be a slow half to the fiscal year, why were its forecasts 20% out? And if the first half was so good, why is inventory sitting on shelves?
That said, Microsoft seeing a profit for its games division is ambitious in itself. The only time it's ever turned an operating profit was during the 2004 financial quarter in which Halo 2 was released.
Generally if a division fails to turn a profit at Microsoft it gets cut. It also means shareholders are no doubt getting miffed about a division that could be perceived as dead weight. The Xbox's continued existence is testament to Microsoft's desire to own the living room.
This ‘Media Center’ strategy is based on Vista, and according to the company will create:
”…a consumer-electronics-quality living-room experience, (with) new options for multi-room access to your entertainment through Media Center Extenders, including Xbox 360.”
For more on Vista today click here.
Companies:
Microsoft
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Comments
OptimusP 26 Jan 2007 14:08
1/2
Thing is, if the Xbox-division is not profitable this year, it's really going to get cut.
Because J Allard promised shareholders profitaiblity by end 2007 in 2003 when shareholders were allready threathening to cut it.
very interesting console wars, one console is so caught in extremes it's going to flop or change gaming forever, one can be cut at the end of the year by the mother company and the last one can actually bankrupt the mother company if it fails.
That's it , i'm becoming a gaming historian...
Because J Allard promised shareholders profitaiblity by end 2007 in 2003 when shareholders were allready threathening to cut it.
very interesting console wars, one console is so caught in extremes it's going to flop or change gaming forever, one can be cut at the end of the year by the mother company and the last one can actually bankrupt the mother company if it fails.
That's it , i'm becoming a gaming historian...
DoctorDee 26 Jan 2007 15:24
2/2
OptimusP wrote:
one console is so caught in extremes it's going to flop or change gaming forever
I have a reputation for seeing things in black or white, but I disagree. I think there is a massive area of possibility for the Wii to exist and be profitable without changing everything forever. It offers an alternative to traditional gaming, it does not render it obsolete.
one can be cut at the end of the year by the mother company
Again, I disagree. Microsoft has put so much into this, and it's going well enough that even if it is not profitable by the end of 2007, they'll keep going.
and the last one can actually bankrupt the mother company if it fails.
Rather predictably, I disagree. I think early sales in Japan and USA show there is a market for PS3. It's not going to go down in flames. Even if its overall performance is disappointing for Sony, it's not going to take the company down.