Xbox 360 Launches

Inventory shortages were apparent as the Xbox 360 launched in North America on Nov. 22, 2005, and similar scenes could occur in Europe and Japan in December. To mitigate the effects of shortages on retailers and gamers, Microsoft has pledged to replenish the channel weekly—unusual for a game console at launch—and in early 2006 will add a third manufacturer, Celestica, to the current roster of Flextronics and Wistron. Yet, Sony’s PlayStation 2 (PS2) suffered similar shortages at launch, but demand never wavered, and Sony has sold more than 36 million consoles in North America and 90 million worldwide.

Great Expectations

Microsoft expects to sell 2.75 million to 3 million Xbox 360s by mid-February and plans to take in more than US$1.5 billion in revenue by that time from the sale of consoles, peripherals, games, and subscriptions to the Xbox Live online service. This will help the company establish an early sales lead over Sony and Nintendo, which plan to launch competing consoles in 2006.