Xbox 360 shipments fail to reach target

Microsoft acknowledged on Thursday that, in addition to experiencing an unacceptably high rate of hardware failures with the Xbox 360, the game console has also failed to reach its sales target.

The company had said it would sell 12 million of the consoles by June 30. Instead, it has shipped a total of 11.6 million units, Chief Financial Officer Chris Liddell said on a conference call

"That is slightly shy" of its projections, Liddell said, but added "we're happy with that number."

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DrRage774004d ago

this type of news is something that microsoft is not going to just sit by and take....expect a price drop across the board on the 360's in early fall to help boost sales even more than just Halo3 alone will do

ALI G4004d ago

they only sold 1.2 million xbox 360 world wide .howwwww ? WHAT IS WRONG WITH THIS MICROSOFT .what is make me angry the most they started the year with around 7 million unit a head of commpitetor and then they have done nothing at alllllllllll to strength there position.most of the high profile games been delayed like too human, mass effect ,two world(was for march than pushed to may and now ...) bioshock was for april.come on microsoft you cannot stop in the middle of the marthone just becuse you are the first.learn from that story (the rabit and the Tertul)

Odion4004d ago

they missed it, they had a weak first half hopefully they will pick up in the second half, i still think they can slam dunk like 16 million by years ends

techie4004d ago

Missed it just like PS3 missed there's by .5 million.

Apocalypse Shadow4004d ago (Edited 4004d ago )

then fail to sell 2 million in 6 months for 2007.

and it's shipped.not sold to gamers.

tack on the fact that the system has to be covered with a warranty for the entire next gen era because of RROD and that's just not looking too good.

dropping the price just puts them more in the red.what was it?1 billion to cover fixes to cover up the hardware failures and to dodge a class action lawsuit?

EDIT:who do you think is going to pay for that 1 billion?microsoft?nope.360 gamers.i mean,they are already.your free xbox live just went out the window. ...nintendo has a chance of hitting first place

PS3n3604004d ago

I feel there is a class action brewing as well. If mine dies I will be on that list too.

Odion4004d ago

1. Moron its sold sold not sold to retail
2. PS3 is still sucking more
3. Atleast they owned up to it and are taking the bill

Why o why4004d ago

shipped not sold spin king

but at least their admitting something we all knew AND are REALLY trying to fix it. This can only improve the average consumers perception of the 360 and ms, maybe

DrRage774004d ago (Edited 4004d ago )

yeah but guess what? sold to retailers is EXACTLY how sony counts ps3 what's your point? try not to point a finger when sony is doing the same thing...makes your comment kind of pointless, no?

also, i will use the same excuse i have read dozens of times from sony fanboys...the 360 has not sold great the first half of this year because they have had almost zero anticipated titles coming out during that time. in early fall, we are seeing Halo3, Blue Dragon, Mass Effect, Bio Shock and several others...let the sales begin lol

and yes, the ps3 will be coming out with their better games at the same time so let's not keep comparing pointless sales numbers during both consoles slow months....oh, by the way, even during it's slowest months in the u.s., the 360 still sold 150,000 or more every month and the ps3 sold around 80,000 for the past several months

ALI G4004d ago (Edited 4004d ago )

aimed at 6 million by 30march 2007, today is 06/07/2007 sony has not reached that yet.........they..stil....has. .......not......reached ..........4......millions..... .yet..
enough said

Why o why4004d ago

1. Moron its sold sold not sold to retail
2. PS3 is still sucking more
3. Atleast they owned up to it and are taking the bill

is what im responding to. look at his comment. look again at mine. ANY PROBLEMS SIR. What sony say or do has SQUAT to do with the comment above.

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hektop4004d ago

Xbox repairs cost Microsoft $1B
Microsoft will take a $1B charge due to an 'unacceptable' number of repairs under an extended warranty program.
July 5 2007: 6:51 PM EDT

LOS ANGELES (Reuters) -- Microsoft Corp. said Thursday said it would take a more than $1 billion charge to fix "an unacceptable number of repairs" to its Xbox 360 video game consoles and had missed shipment targets for the end of June.

Microsoft (Charts, Fortune 500) is under pressure with mounting complaints about Xbox 360 failures on the Internet and growing expectations that Sony Corp. could slash the price of its rival PlayStation 3 console at a video game exposition next week.

Xbox marks the sore spot
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So far Microsoft has the lead on Sony in the battle for high-end video game machines, but it shipped only 11.6 million 360s by the end of June, compared with a target of about 12 million, Chief Financial Officer Chris Liddell said during a conference call with analysts Thursday.

Robbie Bach, president of Microsoft's entertainment and devices division, said the timing of the announcement about the charge for the quarter ending in June and a new extended warranty were unrelated to any potential move by Sony.

"This is just one of those things that happens when it happens," Bach said in an interview. "We reached our conclusion early this week and because it's a financially meaningful issue we had to announce it immediately."

The hardware issue has marred a string of successes for Xbox 360, which has built an early lead over the PlayStation 3 with Microsoft's strong lineup of games and popular online service.

But it is also finding increasing competition for some parts of its business, such as Apple Inc.'s incursion into television shows delivered over the Web, which is also a feature of the Xbox online service.

Red flashing lights
Microsoft said it had investigated the sources of hardware failures indicated by three red flashing lights on the console and had identified "a number of factors" that can cause such failures.

Bach said many of those factors took time to show up in the consoles, explaining why the number of repairs had grown in the second year of the Xbox 360's release. He would not say exactly how many Xbox 360s had been returned due to hardware issues except that "the number is too large."

The company said it would extend warranty coverage to three years to cover the problem and would reimburse customers who had previously paid for repairs related to the three-flashing-lights error message. It also said it has made improvements to the Xbox 360 console.

The charge will be in a range of $1.05 billion to $1.15 billion, before taxes, for the quarter ended June 30, Microsoft said.

Microsoft had already cut its forecast for Xbox 360 shipments in January. It had previously forecast shipments of 13 million to 15 million by the end of June.

"What you have to ask yourself as an investor is, should Microsoft be in the hardware business?" said Kim Caughey, senior analyst at Fort Pitt Capital Group, which oversees about $1.2 billion, including Microsoft shares, for clients.

She added, however, that the charge should not be a concern for long-term investors.

"It's a lot of money, let's not say it isn't," Caughey said. "But if you're a long-term holder, I don't think it's going to have that great an impact."

Bach said the new warranty would not impact the Xbox division's plan to turn a profit in fiscal 2008, which started this month.

He was also mum on the issue of whether Microsoft would announce a price cut for the Xbox 360 console if Sony made a similar move.

"We will assess what we do with pricing and other aspects of our business based on our own business," he said.

Microsoft shares dropped slightly to $29.91 after closing at $29.99 on Nasdaq

AngryTypingGuy4004d ago

Not really. I'm happy with my 360 and the superior game library and gaming experience it offers and will continue to offer. If I ever won a PS3, I would sell it and buy more 360 games. Although, if Microsoft ever quits making consoles, then I would definitely get whatever PlayStation is out at the time. I'm not holding my breath for that to happen though.

reaperxciv4004d ago

negatory, i'm solved with my kickass PC and 360.

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