NEWS - Friday, October 7, 2005

Xbox 360 May Be Impossible To Find This Christmas

NEW YORK (CNN/Money) – Getting your hands on one of this holiday season’s hottest gifts might be even harder than you think – and it might get even more expensive. While Microsoft has still not given precise shipment numbers for the Xbox 360, two sector analysts say the numbers seem to be slipping. That could lead to even higher priced game sets in a market that already seems to be on the verge of price gouging. Wall Street has been expecting Microsoft to deliver more than 2 million of its next generation consoles to retailers worldwide this year. On Monday, though, P. J. McNealy of American Technology Research lowered his expectations to the 1.8 million – 2 million range. Friday, Banc of America’s Gary Cooper said he believes the company will ship just 1.4 million – 1.6 million. There was never any question that the first ’next generation’ video game machine would sell out this holiday season. A cocktail blend of enthusiastic players and Santa’s helpers virtually guarantee that demand for the machines will outstrip supply. It happens with every major holiday gaming hardware launch. (Skeptical? Think back to last year’s desperate hunt for a Nintendo DS.) Complicating matters is Microsoft’s plan for a worldwide launch of the 360. That means those initial shipments, whatever they turn out to be, will be split between North America, Europe and Japan. McNealy said he expects Microsoft to send roughly 900,000 to 1 million units to North American retailers, 600,000-800,000 to Europe and another 100,000-200,000 to Japan. Cooper’s prediction is more dire, saying there will only be between 300,000 and 350,000 units available in the U.S. on Nov. 22, when the system launches. (Cooper, in a note, said he expects two shipments from Microsoft this year – one before launch and another in December.) "Concerns about shortages, parts problems and other associated inventory qualms are typical of any console hardware transition," wrote McNealy. Microsoft representatives were not immediately available for comment. The expected shortages could prove beneficial to entrepreneurs and select retailers. Officially, there are two price points for the Xbox 360: $299 and $399 (one bare bones and one tricked out). And while you might be able to buy just the machine if you’re willing to camp out at your local Wal-Mart or Best Buy the night before they go on sale, many retailers are only selling their allotted units in outrageously expensive bundles. GameStop, for example, offers five different pre-order packages for would-be owners of the machine, ranging in price from $700 to $4,500. That $4,500 bundle, for those of you gasping for air, includes (among other things) 20 games, three extra wireless controllers and a 42-inch plasma TV. It’s eBay where I suspect the real fortunes will be made, though. Already, those lucky enough to receive early accessories for the system have been making tidy profits from selling that merchandise to enthusiasts. The faceplate given out at the E3 press conference, for example, has fetched as much as $306.99 – more than the basic version of the machine itself. How far will bid prices go for an actual Xbox 360? It’s anyone’s guess. But if you’re planning to pad your bank account by flipping one, you’d better hurry. January will bring a new round of shipments and a likely drop-off in demand.


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