NEWS - Thursday, March 15, 2001

XBOX Pre-Orders

MCV posted news today regarding the position that Microsoft stands on pre-orders for the XBOX. According to the post Microsoft has yet to actually start the pre-ordering campaign with retail outlets such as Babbages, Electronics Boutique and Toys R Us, but has let the companies do their own pre-order programs.

"Babbage’s has been doing gangbusters at presale," with multiple tens of thousands of orders, to the point that the chain has opted to increase the price of the deposit to control demand, John O’Rourke, Microsoft’s director of US sales and marketing for Xbox, tells MCV.

While Microsoft isn’t encouraging preorder campaigns per se, O’Rourke notes that it couldn’t prevent retailers from setting up preorder campaigns even if it wanted to, lest it break antitrust laws.

Still, O;Rourke acknowledges that excessive preorders could create demand Microsoft is later unable to meet. "It’s one of those instances where you must have clear communication with the retailers," he says. "In some cases we’ve tried, where it makes sense, to caution them about not putting themselves in a situation that would be bad for the customer."

A few months ago Sony contacted retail outlets threatening to stop shipments of PS2’s unless all XBOX promotional material was removed from the stores. While some of the stores complied for fear of loosing their sales for PS2 machines, most of the outlets took a stand. We clarified the Sony threats with our local Babbages and EB store, of which both stores had been contacted.

O’Rourke plays down suggestions that this is, or might become, a problem for Microsoft. "We’ve heard from our retail partners that there have been discussions with other companies who’ve suggested that this newcomer [i.e., Microsoft] isn’t something you should spend a lot of time with," he tells us. "The good news is most retailers laugh it off. They think our whole approach is nice and refreshing.

“[Retailers] aren’t just the last step in the chain, there to do our bidding. So when someone suggests to them ’hey, I suggest you take down those Xbox point of purchase materials,’ in some instances they may do it because they have a short-term business need, and we understand that. Other times they’ll just look at it and laugh it off."

You can check out the whole article here.


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