NEWS - Friday, December 2, 2005

European Xboxers Getting Theirs

Numbed by freezing rain, Europeans sipped cocoa and huddled for hours under umbrellas for a chance to grab an Xbox 360 as a limited supply of Microsoft’s much-hyped game console went on sale in Europe on Friday, 10 days after its dazzling debut in North America. An estimated 300,000 of the machines reached Europe, but Microsoft has admitted demand will outstrip supply and some would-be consumers will have to wait weeks or months to get consoles. Outside Game’s flagship store on Oxford Street in London, customers who pre-ordered the machine started lining up at 1 p.m. Thursday although the store couldn’t release the consoles until Friday. Unable to provide enough consoles, Microsoft handed out umbrellas, pizza, and hot chocolate to the estimated 500 shoppers who had queued up by midnight. Kevin Sage, who waited nine hours in the line to get the console he ordered in September, was the first Brit to get a machine. The 33-year-old then said he was heading home to start playing games. A 26-year-old woman from South London spent most of Thursday waiting in line so she could give an Xbox to her boyfriend for Christmas. “He better get me something good in return,” she quipped. At midnight in Paris, the FNAC Champs Elysées sold 360 consoles to people who had not pre-ordered, attracting more than 300 people who, according to press reports, lined up in frigid weather on the busy Paris boulevard for as long as five hours. “Across Europe it was pretty much the same, with hundreds and hundreds of stores opening at midnight and people queuing up for hours on end,” said Microsoft’s European Xbox spokesperson Stephen McGill. The Xbox launch is critical for Microsoft, which desperately wants to gain ground on Sony (see Xbox 360 Starts Console War). Microsoft sold only about 26 million of the last version of its Xbox. Sony sold 100 million of its PlayStation 2 consoles, but won’t release PlayStation 3 until next summer. Microsoft is spending an estimated $525 to make each Xbox 360, which retails for $399. The company hopes to make up for the losses through software sales and licensing revenue. But Redmond has pumped about $4 billion into the Xbox franchise so far without turning a dime in profit. In the United States, Microsoft shares climbed $0.21 to $27.89 in recent trading. Xbox Airlift Microsoft chartered planes to ship consoles from Chinese plants to Europe to try to keep up with the strong demand in Europe, according to Mr. McGill. He suggested that frustrated shoppers who can’t find a console right away may want to “check every week and put your name down on a list.” Many consumers may fall into that category. “Our goal is to make as many Xbox 360 consoles as humanly possible, and our manufacturing facilities are working 24 hours a day,” said Microsoft spokeswoman Tara Mulcahy. “Unfortunately… demand will outstrip supply for the short term.” Microsoft declined to disclose the specific allocations to various launch locations, but Ms. Mulcahy said the company hoped to sell 2.75 million to 3 million consoles during the first 90 days, and 4.5 million to 5.5 million by the end of Microsoft’s fiscal year in June. Microsoft is estimated to have sold between 300,000 and 400,000 consoles since the machine went on sale November 22. But, as in Europe, most American gamers hoping to buy the console on launch day went home empty-handed. Crashing Consoles Microsoft is downplaying scattered consumer complaints that some of the consoles freeze or display cryptic error messages in the middle of games (see TechSpin: Xbox Goes Tilt). The company said the return rate is “significantly lower” than the 3 to 5 percent average within the consumer electronics industry. And Microsoft has offered to pay overnight shipping costs at both ends to replace defective consoles, assuring consumers the problem machines will be replaced in less than a week. “Of the total number of Xbox 360 systems already in the field, the calls we’ve received represent a very small fraction,” said Ms. Mulcahy. “We’re doing everything we can to take care of these customers quickly."

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