NEWS - Monday, January 29, 2007
Problems Ahead Following 360 Cuts
The hardware giant’s revised predictions have already led to a stock exchange dip for four major publishers, with EA, Activision, Take 2 and Midway all seeing share prices drop between one and four per cent immediately following Microsoft’s announcement. GameDaily reports American Technology Research analyst P.J McNealy believes that Microsoft’s decision to reduce its shipping estimates of Xbox 360 hardware from 13-15 million by June 30th to 12 million is unlikely to have been foreseen by publishers and investors. “Video game publishers will be under pressure after Microsoft cut its life-to-date shipments,” McNealy stated. “We believe Microsoft’s news will be a considerable headline risk that compounds other investor fears such as the ramp curve for PS3.” “We believe that most investors had not lowered their Xbox 360 expectations closer to 13 million rather than 15 million in their models by the end of June. One million units, even with a tie ratio of ten per cent, with a wholesale revenue of $50 a unit, would mean approximately $5 million.” McNealy also stated that the move could represent Microsoft’s intention to reduce the number of consoles in the channel ahead of a release of a modified version of the console later in the year, though the analyst later retracted this statement.Source: http://www.mcvuk.com/
