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Microsoft Corp.

Xbox 360 Shortage Continues to Plague Retail Outlets

Strategic Insights

— 1 min read

Microsoft's next-generation console, Xbox 360, remains one of the hardest items to find in retail outlets, with small shipments leading to high demand and subsequent shortages. To alleviate the issue, Microsoft is increasing its shipments, partnering with a new manufacturing supplier, Celestica Inc., to boost console production. Retailers, such as Best Buy and GameStop, are struggling to keep up with demand, selling out of consoles within hours of receiving new shipments. The online market is also seeing high demand, with Xbox 360 systems selling for upwards of $3,000 on eBay.

Key Takeaways:

  • Microsoft is increasing shipments of Xbox 360 consoles to retailers, aiming to ship two to three times as many units by this week.
  • The new manufacturing partner, Celestica Inc., will join Wistron Corp. and Flextronics Corp. in supplying Microsoft with a greater quantity of Xbox 360 consoles.
  • Retailers like Best Buy and GameStop are experiencing high demand, selling out of consoles within hours of receiving new shipments.
  • Online marketplaces, such as eBay, are seeing high prices for Xbox 360 systems, with sales reaching upwards of $3,000.
  • Sony's delayed launch of the PlayStation 3 may not hinder its chances of capturing a large market share, according to research firm In-Stat.
  • The research firm predicts Sony's PS3 will lead the market with more than 50 percent of the market share by 2010.
  • Nintendo's next-generation console, code-named "Revolution," will launch around the same time as Sony's PS3 and Microsoft's Xbox 360.

Statistics:

  • Microsoft plans to ship two to three times as many Xbox 360 consoles to retailers beginning this week.
  • Best Buy's Lubbock store receives approximately 20 Xbox 360 consoles every week or week and a half and sells out of them within hours of putting them on the sales floor.
  • Xbox 360 systems are selling for upwards of $3,000 on eBay.
  • Sony's PS3 is expected to capture more than 50 percent of the market share by 2010, according to research firm In-Stat.
  • Nintendo's next-generation console, "Revolution," will launch around the same time as Sony's PS3 and Microsoft's Xbox 360.
  • Next-generation console sales during their peak year may not differ much from the peak year sales of the current-generation consoles.

Sources:

  • Daily Toreador, U-WIRE via COMTEX, March 22, 2006.

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