Xbox 360 Launch ...

Miscellaneous Forums/General Discussion/Xbox 360 Launch ...

The Forum Archive is locked. These are the original blitzbasic.com forums, kept so their posts can still be read and searched. No new topics, replies or edits can be made here. To join the conversation, head over to the Blitz3D+ forums.

I don't understand why the hell Microsoft doesn't manufacture enough to meet demand? I would purchase one if I didn't need to be on a calling list and could just walk in to the store, pay cash, and walk away with a console.


There is a good reason for this:

In a major game console launch like the XBox 360, they will sell millions of units the first week, and the numbers sold will quickly drop to a high-but-significantly-less number.

So to have a unit ready on launch day for everyone, they would either:

1) Microsoft can start producing them in greater numbers by creating more factories/production lines.
Of course that will be much more expensive to set up, train all people involved, etc.. After cranking out the initial launch number, demand will drop to a much lower level again when looked at units sold per week... So most of these new lines would be sitting empty, gathering dust and wasting money since you don't need all of them to supply your regular demand.
Motherboard/CPU/chip assembly lines are insanely expensive, these factories cost hundreds of millions of dollars to open.

or:

2) You can start making them months earlier to end up with a larger number in stock on opening day. That means that for those months
- You are literally sitting on hundreds of millions of dollars worth of inventory you don't want to sell yet
- Technology always marches on. By artificially delaying your launchdate by months, the new consoles will be 'less' advanced compared to normal PC's than if they were released six months earlier.
- Delaying your launch date for months will leave enable your competitors (Sony, Nintendo) to release -their- units first, stealing your thunder and part of your potential customer base

So in general, they spend a number of months creating hype and making units to have a 'significant' number of units available on launch date, but to make enough to supply them to everyone on day one does not make business sense, in more than one way.