Microsoft Xbox 360 Sales Forecast Cut Amid Supply Constraints

Strategic Insights -

Microsoft's Xbox 360 gaming console is struggling to meet skyrocketing demand, with the company cutting its sales forecast. The console's popularity has far exceeded supply, prompting a reduction in sales expectations. Despite this, the company remains optimistic, projecting shipments of 4.5-5.5 million units by the end of June. Sales in Japan, however, have been underwhelming, with only 100,000 units sold in the quarter.

Key Takeaways:

  • Microsoft has cut its Xbox sales forecast from 2.75-3 million to 2.5 million units by the end of February.
  • The company expects to ship 4.5-5.5 million units by the end of June.
  • Sales in the December quarter reached 1.5 million units.
  • Demand for the Xbox 360 has outpaced supply in both the US and Europe.
  • Sales in Japan have been poor, with only 100,000 units sold in the quarter.
  • Microsoft's second-quarter revenue was slightly below analysts' expectations.
  • The company's quarterly net profit rose 5% to $3.65 billion or 34 cents a share.

Statistics:

  • Microsoft expects to sell 2.5 million Xbox units by the end of February.
  • The company projects shipping 4.5-5.5 million units by the end of June.
  • Sales in the December quarter reached 1.5 million units.
  • Revenue rose to $11.84 billion in the second quarter.
  • Microsoft's quarterly net profit rose 5% to $3.65 billion or 34 cents a share.

Sources:

  • "Microsoft Xbox 360 Sales Forecast Cut Amid Supply Constraints" (Wall Street Journal, 2006)
  • Microsoft Corporation (2006) - "Second-Quarter Earnings Release"
  • Associated Press (2006)