Xbox 360 shortage conspiracy

Written by Geoff Richards

November 7, 2005 | 02:25

Tags: #allocation #console #pre-order #rumor #rumour #shortage #stock #xbox-360

Companies: #games #microsoft #target #wal-mart

Contrary to popular belief, the Internet was not created as an academic research tool, or indeed, invented by Al Gore. Some say "the Internet is a communication tool used the world over where people can come together to bitch about movies and share pornography with one another" but this neglects another prime use (aside from reading bit-tech of course) and that is cooking up a good Conspiracy Theory.

This week's Rumour Control on Gamespot does just that, with suggestions that Microsoft are deliberately engineering a shortage of Xbox 360 consoles at launch in order to make their global roll-out appear more successful. Sound crazy? Let's look at the evidence.

Last week, Gizmodo reported that Norwegian retailers are being allocated just 20 consoles each: 6 core editions and 14 premium editions. As a condition of this, each shop or chain has to sign an agreement stipulating that they must sell all 20 units on the 2nd December release date. In addition, retailers must agree to bundle at least two titles per console.

Microsoft Norway allegedly confirmed that they would be leveraging this 'Sold Out' tactic to further hype the console. Intruiging? Yes. Disturbing? Most definitely, but wait - there's more!

Kotaku scored some insider info on Target's launch plans. Again, allocation is an anorexic 25-50 units per store, and curiously, managers have been told to pre-print a large 'Sold Out' banner to be displayed when all consoles are gone. The conspiracy theory dictates that this is less of a service to inform customers waiting in line, and part of an evil plot to have every store across America proudly shouting "we have sold out of Xbox 360!"

Why so few units for such a large chain? ArsTechnica quotes reliable sources at some major retailers that they "have been informed by Microsoft that they will be getting as few as one-third the number of Xbox 360s that they had planned for. The rest of those initial shipments are being diverted to the likes of Wal-Mart and Japan." This rumour easily qualifies for a Mythbusters Plausible award: Wal-Mart is the biggest retail company in the world, and when they say 'jump', manufacturers say 'how high?'. Microsoft are also desperate to address the relative failure of Xbox in Japan by maximising Xbox 360's lead on PlayStation 3. This suggests gamers queueing up at their local EB or other gaming retailer may go home empty handed.

The outlook online appears to be just as bleak. Some readers have already been informed that they will not be receiving consoles on Launch Day, with one claiming he pre-ordered so early that there wasn't even a MSRP at the time. Yet he was told he still was not high enough up the list. Gamestop have been "sold out" for quite some time now, though curiously, if you have US$2000, you can still secure a console, providing you also buy every launch title as part of their Omega Bundle.

That's right: if you weren't already one of those people who think that Xbox 360 was expensive, the Omega Bundle comes with the $400 Premium Pack, three extra wireless controllers ($150), wireless kit ($100), faceplates ($20) and other accessories, as well as TWENTY games. Given that most Xbox 360 games will retail for $59.99, that's some $1200 in games alone. Our maths shows that despite this insane bundle, there is precious little discount for your bulk purchase.

With an estimated 2 million units being produced for launch, as many as 1 million may hit retail Stateside for Microsoft's important home market. Success in Japan is a known priority, so expect a fair few being allocated there for the 10th December launch. Where does that leave UK / Europe? With the short straw once again, we suspect.

Our launch is 2nd December, and despite hints that there will be a steady flow of stock from Microsoft's factories in China following Launch Day, top UK resellers have already posted warnings such as this one from Amazon.co.uk:

Due to limited supply from Microsoft, we are unable to guarantee delivery of some Xbox 360 pre-orders for Christmas. Please also note that all pre-orders made on or after November 2nd, 2005 will have expected delivery dates in 2006. We are working with Microsoft to ensure the consoles are delivered as soon as they become available.

Read those words carefully. If you haven't already pre-ordered a month before release, you may still not get your console even with fifteen entire working days between launch and Christmas Day for re-enforcements to arrive. What hope then is there for anyone waiting to pick one up on 2nd December? Play.com have posted a similar disclaimer.

Joystiq are more cynical: "The bottom line: if people were rational, you’d be able to walk into just about any store on November 22nd and obtain an Xbox 360. But all it takes is a little, good, old-fashioned FUD (Fear, Uncertainty and Doubt) to drive sales through the roof and make this rumour a self-fulfilling prophecy.

When was the last time you heard about a product shortage that actually proved to be true?"

It remains to be seen whether the shortages will turn out to be real. You would think "Xbox 360 sells 5 million units on Day One" would make a far better headline than "Xbox 360 sells out because there weren't enough to go around". If demand outstrips supply by a substantial margin, Microsoft may lose a prime opportunity to capture new fans in this Next Gen War with Sony. Indeed, faced with a $400 console that you can't buy, or a $99 PS2 that is in stock, one wonders how many parents will be prepared to give little Johnny an IOU this Christmas.


Have you had your pre-order cancelled by a retailer? We want to hear your strategies for securing a console on Launch Day. Hatch your evil plans in our News Discussion forum.
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