Xbox 360 still a dud, won't make stated sales goals

I know calling the Xbox 360 a dud gets me labeled a hater, but just check out the quotes from Wedbush Morgan Securities in this Next-Generation report.

• Xbox 360 will not be coming to the rescue of the industry any time soon.
• Supply to the U.S could be about 300,000 units a month, at best.
• We do not expect sales of next generation software offsetting the current generation software sales decline until the PS3 and Revolution are launched.

The gist appears to be that software sales for current systems (Xbox, GameCube, PlayStation 2) are down 30% (since last year, I presume) and that even with its current status as the newest console with the highest priced games, the Xbox 360 and its supply problems aren't helping to take up the slack as much as it could.

Although it doesn't come right out and say it, the details of the report also indicate Microsoft won't make the fiscal year sales goals it reaffirmed just three weeks ago.

• First, note that between 850,000 and 900,000 Xbox 360s were sold through January 2006 (using NPDs and Microsoft's estimates, respectively).
• Second, Wedbush Morgan estimates that Microsoft can sell at most 300,000 Xbox 360s per month in North America for the next few months.
• Add these up and Microsoft can hope to have sold at most 2.4 million Xbox 360s in North America by 30 June 2006.

And that's the magic date by which Microsoft just told everyone they'd sell between 4.5 and 5.5 million Xbox 360s. I suppose it's possible that they'll manage to sell the remaining 2.1 million systems in the other territories, but history doesn't support that prediction. Over its entire lifetime, the original Xbox historically sold a bit more in North America than in all other territories combined. Figure in the late Xbox 360 launches in Australia and South Asia, and I just don't see this 4.5 million goal happening, much less the upper limit of 5.5 million. Someone remind me in six months and I'll hold myself to account.

Regardless, with reports like the one from WMS and Activision recently pointing a finger of blame for its own reduced earnings, Microsoft isn't exactly optimizing the headstart it said was critical to taking the crown from Sony this generation. As Ruffin said recently, "[w]hen you consider how quickly hardware goes out of date, this seems like the largest of blunders."

Labels: microsoft, xbox360

--jvm at 20:12

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