Microsoft blames Xbox shortages for lagging sales
Microsoft is citing a shortage
in console availability as the reason its Xbox
360 console trailed substantially behind competitors in U.S. sales for the
second month in a row in February, according to the latest numbers from the NPD
Group.
Xbox 360 sold 254,600 consoles in the U.S. in February, compared to 587,600
for the Nintendo DS;
432,000 for the Nintendo
Wii; 351,800 for the Sony
Playstation 2 (PS2); and 280,800 for the Sony
PS3. Xbox 360 console sales also trailed competitors in January, according
to NPD.
"Our retailers are telling us that Xbox 360 is selling as fast as they
can restock, but due to this high demand, Xbox 360 is experiencing temporary
shortages," Microsoft said in an e-mail from its public relations firm
on Friday. "We are working as quickly as we can to replenish inventory."
Aside from acknowledging shortages, Microsoft also painted a rosy picture around
other numbers associated with sales of games and accessories for the Xbox console.
In its e-mail, the company said a combination of "consoles plus content
plus community" is what "makes a winning platform," and aside
from console sales, Xbox 360 continues to lead competitors in other areas of
the market.
According to NPD, Xbox 360 has a U.S. installed base of 9.6 million versus
the Wii's 8.1 million and PS3's 3.8 million. Moreover, US$159 million was spent
on Xbox 360 games in January, compared to $131 million on Wii games and $80
million for PS3 games, according to NPD, Microsoft said.
Xbox 360 games also continue to sell better than games for competing consoles
and held five of the top 10 spots for titles sold for game consoles, according
to NPD. Xbox 360's Call of Duty 4: Modern Warfare, by Activision, held the number-one
spot with 296,200 units sold, and Devil May Cry 4, by Capcom, held the number-two
spot with 295,200 units sold.
According to NPD, the total video-game market value is about US$1.33 billion,
compared to $992.2 million a year ago, a rise of 34 percent.
Of the markets for consoles, gaming software and accessories, the software
market grew the most in the past year, followed by the market for accessories.
The market for video game software rose 47 percent and is now $668.7 million,
compared to $453.7 million a year ago, while the market for accessories is $185.3
million, a 36 percent rise over $136.1 million a year ago, according to NPD.
The market for video game hardware is now $480 million, compared to $402.3 million
a year ago.
The success of Microsoft's Xbox business is important to watch as the company
strives to diversify its revenue stream and make profits in new markets, such
as gaming, entertainment and advertising. Despite launching its first Xbox console
nearly seven years ago, Microsoft's Xbox business has yet to be profitable,
though company executives have promised it will be by the end of its 2008 fiscal
year on June 30. The division that oversees Xbox 360, Entertainment and Devices,
also is expected to be profitable at that time.
IDG News Service
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