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Friday, December 02, 2005
Neil Thompson Addresses Supply Question
Neil Thompson (Xbox's Senior Regional Director, Northern & Eastern Europe) and Stephen McGill (head of Xbox UK Marketing) were interviewed in a podcast today by the Guardian. I've worked with these guys before, and I agree with Aleks Krotoski that they're both "very affable chaps."
Joystiq's Xbox 360 Fanboy picks up the story along with another from gamesindustry.biz, where they call out Neil's comments about inventory replenishments.
"We're really going to focus all our efforts on getting as much stock in as possible, because the demand is proving to be phenomenal."
"We are committed to replenishing the product on a weekly basis. We're not leaving the market dry for six, eight, twelve weeks - we're going to come out with more product every single week."
As I sift through the comments on this blog (and on Major Nelson's blog), all I can do is offer our apologies that Xbox 360's are so hard to find. I'm hearing about stores that are getting replenishment units (usually just a few), and of course they're gone minutes after they're available.
One thing I might not have been clear about in my previous post:
Each retailer is responsible for its own distribution, allocations, pricing, etc. It's up to them to decide what to do with the units they get from our distribution center. All I want to make clear is that units are being flown from our factories to our distribution center regularly, and that units are being shipped out at least weekly.
At this point, our retailers are probably getting sick of getting phone calls and visits with the same question: "when will you have the Xbox 360?" I'll say the same thing to them that I'm telling you: Just be patient, they're on their way. There won't be units in stock and on shelf at every retailer for weeks to come, but that time will come.
In the meantime, our goal remains to make as many consoles as humanly possible, and our manufacturing facilities are working 24 hours a day. Plus, we have airplanes chartered and flying into our distribution centers so retail outlets can get new shipments as soon as they're built.
It's challenging to get your hands on a console this holiday, yet it certainly isn’t impossible. Keep checking back with your retailer (just try not to be too cranky, they're not happy with the overwhelming demand either...). By early next year, the supply will catch up with the demand, and hopefully everyone will be happily playing on Xbox Live... (and I'll be able to catch up in my email inbox).
If I hear anything more, I'll pass along what I can.
Posted at 04:26 PM in Xbox | Permalink
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Comments
So why did MS decide to launch the console knowing that they would not have enough suppply? Surely they knew how large the demand was. I think it was a stupid decision on behalf of MS. Will probably end up having less sales due to peoples disappointment towards MS.
Posted by: S.A. at Dec 2, 2005 5:25:38 PM
"Several forum threads I’ve seen are talking about folks going into retailers, only to be told that there will be no more units coming because of a Microsoft recall. NOT TRUE! If you're told this by a retailer, let me know."
Every retailer is saying this. It must be true. Maybe not a recall of Xboxs already sold. But probably quite a few that were manufactured are being pulled back. How would all these old ladies who would not be surfing the net for info on the 360 have any inclination about a recall? They were obviously told about a recall from superiors who were told by MS.
Posted by: S.A. at Dec 2, 2005 5:32:37 PM
"just try not to be too cranky, they're not happy with the overwhelming demand." I guess we should just sit back and be happy about being lied to. Plain and simple someone is lying, either the retailers or MS. This is horrible. "It's challenging to get your hands on a console this holiday, yet it certainly isn’t impossible." No, not with ebay around...Finally, I am sure once I get my 360 I will blissfully be unaware of how MS treated their customers and will happily look foward to doing business with them again...right.
Posted by: Eric Garcia at Dec 2, 2005 5:57:15 PM
"We're really going to focus all our efforts on getting as much stock in as possible, because the demand is proving to be phenomenal."
The demand IS NOT phenomenal, it's the fact that MS is dumb enough to only release 400k units when there was at least 500k pre-orders well before the launch. Pathetic.
Posted by: Shareef Yousef at Dec 2, 2005 8:23:49 PM
By the time the Xbox 360 becomes available regularly, the PS3 will come out. If I have to wait, I'll get the PS3. Screw MS, I've already gotten a refund on my pre-order.
Posted by: Ed Proper at Dec 3, 2005 2:04:42 AM
I live in the suburbs of Washington DC and here's a summary of the comments I've received from various retailers.
Costco - We expect one more shipment between now and Xmas but don't have any idea when, or how many. There system apparently indicates Microsoft is not accepting orders for new shipments either.
Target - There's been a recall and we won't get anymore units until February. - I went on to explain to the nice little lady that there has not been a recall and Microsoft is only replacing defective units (estimated at <3%).
Best Buy - By the end of this week they were answering the phone, "Thanks for calling Best Buy, where we don't have any Xbox 360s". When I spoke with clerks I was told, we expect a shipment sometime between the 18th of December and Xmas. We don't know exactly when or how many units.
Wal-Mart (this morning) - "If you find an Xbox 360 let me know. Based on my research we won't be getting anymore in, and don't even have the ability to order any - our system shows the item as having been deleted."
Toys R Us (depends on whom you talk to) - One clerk said they have heard that Microsoft is making shipments on Tuesdays, but they have no idea when they'd arrive or how many units they'd include. Another clerk told me there had been a recall and because Microsoft was having to replace defective units, no new ones were shipping out at all.
As you can see - the information on the retail side is all over the place. The search for an Xbox 360 is today's version of the search for the golden tickets in Willy Wonka and the Chocolate Factory!
Posted by: Michael Randolph at Dec 3, 2005 5:16:41 AM
I am just wondering, how many of the commenters here, have been part of a world wide product launch that is below the standard for faulty hardware, and met EVERY pre-order or demand on launch day?
Posted by: Matt Gerlach at Dec 3, 2005 5:55:50 AM
Thats true Matt. Plus I fully expect Sony to do the same thing.. even though I suspect they will only one area at a time, not simultaneously worldwide. This is a new thing, very ambitious. Don't know if its good or bad, but if it can be done Micro can do it. Evil Empire and all, you have to be able to do something good to be so profitable...
Posted by: Syin at Dec 3, 2005 7:05:17 AM
"we're going to come out with more product every single week."
Starting when?
Checked 7 places today.. they have not recieved any 2nd shipments yet.
No more waking up at 7am on a saturday morning.
I give up.
Posted by: philbert at Dec 3, 2005 7:33:21 AM
The weekly restocking seems like propaganda to me. MS knew the demand based on pre-orders. I believe that alot of US preorders are in Europe and going to Japan. Every retailer I have spoken with says the same thing, (and I am D.C. as well). I pre-ordered mine in JULY, and I did not recieve my product on the 22nd. At the time I was told that no one had any idea when the next shipment was coming, maybe next year. As of this morning, 12-3-2005, my local store tells me maybe before Christmas, and the corporate office of EB has no official statement since MS has told them nothing official. My problem with this is that MS and it's disributors had a very good idea as to what the demand was, based on preorders. Yet, when MS announced that it would be unable to fufill it's orders they continud to take peoples money for more orders when they had no intention of delivering them on the promised date. This has left a very bad taste in my mouth. Had I known that my preorder was worthless I would have obtained a refund and taken my chances waiting in line with everybody else.
Posted by: coalhalo at Dec 3, 2005 10:09:03 AM
Saw a four receipts from people in California Irvine/burbank getting them from target this morning and another guy who got one in michigan since they messed him up on launch day. 10 per store was the norm. But nothing else.
Posted by: philbert at Dec 3, 2005 10:35:40 AM
I also had pre-ordered in July, expecting to have my Xbox 360 by
the initial launch, or at least this week, but I guess that won't
be happening. What bothers me more is that I was confidently tolld
more than one time that there would be an Xbox 360 available for
me this week, but now I am not knowing when a shipment will show
up again. This sucks. I would have made an attempt to get one on
the 22nd if I knew this would be the case. Thanks for the heads
up Microsoft.
Posted by: Ross at Dec 3, 2005 11:04:55 AM
What is simply amazing is the number of xbox 360 units being bought, and then resold on ebay and other places http://www.next-gen.biz/index.php?option=com_content&task=view&id=1779&Itemid=2
When 40,000 of 400,000 xbox 360's have gone through ebay, and possibly more your going to have issues with people not getting consoles.
There are 6300+ items listed for xbox 360 on ebay.ca right now (say 5000), and 15,850+ on ebay.com (say 12,000), 3230+ on ebay.co.uk (say 3000) and thier release was yesterday.
I would love to side with Microsoft on this one, there isn't a supply problem, there isn't a demand issue. There are a large number of profiteers scooping them and fouling the system. As for retailers lying to customers the only thing that Microsoft could really do to improve their image is to release weekly how many boxes have been shipped and to who, or at least tell the retailers if they don't start informing their staff they have to resort to that.
Then again, maybe the retailers are telling the truth and microsoft is spinning it. However I'm #75 on my local eb pre-order list, my 'guy' said they are getting a few in each week and should receive a large order before christmas. I'm guessing a large number of xbox 360's are stuck on a freighter in transit to the usa and elsewhere.
Posted by: Jason at Dec 3, 2005 11:07:36 AM
Even if MS has dropped the ball on the supply side, it's clear that their retailers are embarrassing them. Lies, misinformation, employees buying all of the consoles or setting them aside for friends/family. Failure to follow their own stated policies.
MS definitely bears some responsibility for this, though. THEY signed the agreements with those retail partners. Other than the midnight launch at the Bellevue, WA Best Buy, I haven't heard a single story of a retailer getting it right. Lies about recalls, next shipments in March 2006 - after talking/visiting with over 30 retail outlets (and counting) I haven't heard anything close to the truth yet.
You'd think a company of MS size would have a little more "pull" with these partners. And IF there is so much demand, can't they threaten to pull supply to retailers that are abusing the system and sell direct or go through the few retailers that are getting it right (or closest to right)?
Posted by: skrati at Dec 3, 2005 11:32:05 AM
Target is still stating that there IS a recall. This was communicated to the personel via a conference call with their management. During that call they also stated they will receive ONE shipment between now and christmas, at an undetermined time.
I understand the difficulties, but retailers have strategies for launching products which seems to be inconsistent with the microsoft shipment schedule. At this point it is up to microsoft to work with the retailers to fine tune those strategies and let the consumers know what to expect. Acting as if this is a hands off situation is definitely not the proper action.
Scot
Posted by: Scot at Dec 3, 2005 11:45:14 AM
not that i preordered... but people who preordered should have gotten theirs before people were able to just line up on the 22nd and buy them. it really isnt fair to people who preordered that now they are being forced to wait for a second, third, or even fourth shipment when it would be easier to wait until they are flooding shelves to buy
Posted by: steve at Dec 3, 2005 12:11:06 PM
Why lie about weekly shipments?
Posted by: WeWant360.com at Dec 3, 2005 12:30:34 PM
Like many, many others, I feel this is just getting down right frustrating.
Weekly shipments are not being lived up to what it's suppose to be. I've called many stores this morning (like everyone else) and finally got one Target that had gotten a new shipment of X360's this morning - A staggering FOUR consoles; 2 Prem. and 2 Core. The lady also informed me that all 4 were sold out in literally under 5 minutes after the store opened at 9 in the morning. Chances are, these newly purchased X360s are going to be put up on ebay along with 40,000+ other consoles (See here: http://www.nasdaq.com//aspxcontent/newsstory.aspx?selected=MSFT&symbol=MSFT&textpath=20051201%5CACQDJON200512011106DOWJONESDJONLINE000941%2Ehtm&cdtime=12%2F01%2F2005+11%3A06AM ).
40,000 units on ebay selling for an average of $700. Think about the money you lose from this.. more importantly, think of how one system thats posted on Ebay could be in one devoted gamer's grasp at this very moment. People have paid in full for their X360 since May, and yet they're left to wait another questionable week after another.
Now that the system has launched in Europe and soon Japan in a couple of days, the vision of getting a new X360 in your hands becomes farther and farther. Now the world will have to wait for shipments, and that will stall time for a long, long time for people who just want to get their hands on this system before christmas.
It's quite depressing really. More over, it creates a whole lot of anger after each and every reassuring comment you guys make ( ex. weekly shipments ) which happens to just fall short a couple miles.
Please, I don't mean to give you another wall of text. But the message is simple for alot of gamers: Where is our Xbox 360s?
Posted by: Jinatra at Dec 3, 2005 12:34:06 PM
I was really looking forward to getting my hands on the new 360. I pre-ordered months ago and so far have missed out on the UK launch and still have no idea if I am likely to see one before Christmas. My kids will be so dissapointed. What ever happened to Santa!!!
Posted by: Andy at Dec 3, 2005 12:59:54 PM
While I understand why MS wants huge buzz about an in-demand product, lying to the consumer that "we have more coming every week" and "It's challenging to get your hands on a console this holiday, yet it certainly isn’t impossible" is downright unethical and rude.
Sure, we all want the 360 to do well so we can have better games in higher volume. We also understand that launches never produce as much product as people would like to buy. But this launch is ridiculous in it's dearth of product availability. Most every store I've entered in the last week has either taken down 360 displays or minimized them into a corner somewhere, because they know the 360 is a "non-product" this holiday season. Every bit of shelf space, phone time and service person time dedicated to the 360 this holiday is money lost. It won't take you more than 5 minutes to hear a store employing complaining about having to answer questions about the 360... this is bad marketing! Even your estimates of "3 million sold in the first 90 days is a lie", considering you don't have the capacity to manufacture that many in that time frame, much less deliver them.
Please Microsoft, we will buy your 360. It rocks and we all know it! Just start being honest about when they will arrive. Teasing us with 10 units a week to select stores is nothing short of irresponsible. And even after this fiasco I am willing to forgive you for letting me put down real money under the illusion that I might get something for it this year. I'm still on the hook, but I can't stomach much more of your BS. Your marketing stunt worked, now back off, shut up and just make the damn things!
Posted by: at Dec 3, 2005 1:17:22 PM
