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Xbox One Production Could Temporarily Cease

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#1 GotBored

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Posted 26 April 2014 - 04:52

Xbox One Production Could Temporarily Cease

http://www.maximumpc...rily_cease_2014

 

Too much supply and not enough demand

 

While the Xbox One was not the primary topic of discussion, implications were made that Xbox One production might cease or slow down in the coming months.

 

According to Microsoft, 1.2 million Xbox One consoles were shipped globally in addition to 800,000 Xbox 360s within the third quarter. Last week, Microsoft had announced that five million Xbox Ones had been sold to retailers but didn’t provide any numbers as to how many of those consoles were sold to consumers.
 
While the Xbox One has seen impressive sales numbers, Microsoft revealed back in January that three million units had been sold to consumers, there are units just sitting on store shelves. To deal with the inventory surplus Microsoft CFO Amy Hood said, during the investor call, “We do expect to work through some inventory in Q4.”
 

 

In that same call, however, she also referred to, “channel inventory drawdown for Xbox consoles” which could mean a halt to production or slowdown of production until the stock currently sitting on shelves has been sold by retailers.

 




#2 Gerowen

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Posted 26 April 2014 - 05:06

As good as the 360 sold in the U.S., seeing as how it had a year head start on the PS3 and garnered a larger audience, you would think there would be that many more people sticking with their brand and upgrading to the XBOne.  Slowing down production to meet demand in and of itself isn't news.

 

I've seen a few of my friends who have both of the new consoles post that they enjoy their PS4 more.  I don't have either of the consoles yet, but would like to upgrade from my PS3 to a PS4.  What exactly is holding the XBOne back?  I seem to be seeing a lot of posts on here about how bad it's doing.



#3 Blackhearted

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Posted 26 April 2014 - 05:15

As good as the 360 sold in the U.S., seeing as how it had a year head start on the PS3 and garnered a larger audience, you would think there would be that many more people sticking with their brand and upgrading to the XBOne.  Slowing down production to meet demand in and of itself isn't news.

 

I've seen a few of my friends who have both of the new consoles post that they enjoy their PS4 more.  I don't have either of the consoles yet, but would like to upgrade from my PS3 to a PS4.  What exactly is holding the XBOne back?  I seem to be seeing a lot of posts on here about how bad it's doing.

 

Weaker hardware for a significantly higher price than the ps4

Worse multiplatform titles due to that hardware

Kinect whether you want it or not

No worthwhile exclusive titles for nearly the whole year before, maybe, the fall season

The damage microsoft did to themselves with their mess of a reveal

 

Those could be a few things.



#4 mrp04

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Posted 26 April 2014 - 05:17

As good as the 360 sold in the U.S., seeing as how it had a year head start on the PS3 and garnered a larger audience, you would think there would be that many more people sticking with their brand and upgrading to the XBOne.  Slowing down production to meet demand in and of itself isn't news.

 

I've seen a few of my friends who have both of the new consoles post that they enjoy their PS4 more.  I don't have either of the consoles yet, but would like to upgrade from my PS3 to a PS4.  What exactly is holding the XBOne back?  I seem to be seeing a lot of posts on here about how bad it's doing.

 

People overall seem to be less loyal to the brand and more to the value proposition.

 

From the moment they announced it at E3 I knew Microsoft had made a mistake betting big on Kinect 2.0. The motion/alternative input gaming fad was just that, a fad. It was last generation. "Casual" gamers have mostly moved on to mobile/tablet gaming, what's left is the more traditional consumers. The Xbox One costs $100 more and gives you weaker hardware. Yeah it gives you the Kinect, but the Kinect isn't good for any kind of game that requires precise, consistent input. 

 

Plus that fiasco with the DRM didn't help them at all. 



#5 neoadorable

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Posted 26 April 2014 - 05:20

Might be buying another one as a gift, so that's one more to make if that deal goes down :D



#6 Torolol

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Posted 26 April 2014 - 05:21

People should always priorities values they got for their monies, instead of sheeplish brand loyalty.



#7 spenser.d

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Posted 26 April 2014 - 11:35

Makes sense, though I doubt it'll last long as they'll need stock for their second worldwide launch this fall.

#8 OP GotBored

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Posted 27 April 2014 - 14:35

As good as the 360 sold in the U.S., seeing as how it had a year head start on the PS3 and garnered a larger audience, you would think there would be that many more people sticking with their brand and upgrading to the XBOne.  Slowing down production to meet demand in and of itself isn't news.

 

I've seen a few of my friends who have both of the new consoles post that they enjoy their PS4 more.  I don't have either of the consoles yet, but would like to upgrade from my PS3 to a PS4.  What exactly is holding the XBOne back?  I seem to be seeing a lot of posts on here about how bad it's doing.

 

As others have mentioned weaker hardware, weaker multiplatform game graphics/performance due to the weaker hardware, costs more due to bundled kinect, original DRM restrictions, few other reasons but I think these are the main ones.

 

I think it will sell a bit better in 2015 when the Xbox One Halo game comes out as that is the main system seller for the Xbox, but with that being said Bungie Studios (The creators of Halo) have gone multiplatform and are releasing the game 'Destiny' on PS4 also so maybe the brand loyalty isn't as strong as it used to be.



#9 srbeen

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Posted 27 April 2014 - 14:45

Makes sense. They have no titles to push sales yet and it isn't backwards compatible. Hell, the same games coming for the Xbox One are releasing on the 360 (watch dogs, titanfall) Add to that its the worst of the two this round, and the PR fiasco when they announced it, the 'minor' improvements in gameplay considering the Xbox --> Xbox 360 improvement, and the $100-now-equalized higher pricing... Those who wanted one got one, and those who don't want one will are picking up a $100 PS3/Xbox360 right now and throwing $400 into a stack of 30 used games.



#10 trooper11

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Posted 27 April 2014 - 20:42

Well that's not good to hear.

Looks like MS' chickens are coming home to roost. I'm starting to think there is not much to be done at this point. Once you get enough people to see a product as poor, sometimes no amount of changes or improvements can change that.

I think the reasons why have been clearly spelled out already, no need to rehash them.





One question though, the quoted piece from the article is:

“channel inventory drawdown for Xbox consoles”

Now did she actually say X1 somewhere else in the article or could that statement be related to the 360 as well? I know the 360 is still selling well, but is it possible they had too much 360 inventory sitting around?

#11 TheExperiment

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Posted 27 April 2014 - 20:49

All I see as a potential buyer is that there're no games yet that would tear me away from my PC.

 

They're sitting on a whole lot of nothing so far.



#12 spenser.d

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Posted 27 April 2014 - 21:41

Well that's not good to hear.

Looks like MS' chickens are coming home to roost. I'm starting to think there is not much to be done at this point. Once you get enough people to see a product as poor, sometimes no amount of changes or improvements can change that.

I think the reasons why have been clearly spelled out already, no need to rehash them.





One question though, the quoted piece from the article is:

“channel inventory drawdown for Xbox consoles”

Now did she actually say X1 somewhere else in the article or could that statement be related to the 360 as well? I know the 360 is still selling well, but is it possible they had too much 360 inventory sitting around?

 

 

Again, you seem to be drawing far more dire consequences out of something that is common sense. They sold 3 million consoles in a month and a half and 2 million the next three months, and we're heading into a pretty dry summer - of course they're going to dial down production.  This is nothing out of the ordinary and nothing to be particularly alarmed about.  Now, if we get to this fall when some more games are going to hit, and get to the holiday and they can't draw up sales for some reason, then you'd have a good reason to be alarmed.



#13 trooper11

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Posted 27 April 2014 - 21:56

Again, you seem to be drawing far more dire consequences out of something that is common sense. They sold 3 million consoles in a month and a half and 2 million the next three months, and we're heading into a pretty dry summer - of course they're going to dial down production.  This is nothing out of the ordinary and nothing to be particularly alarmed about.  Now, if we get to this fall when some more games are going to hit, and get to the holiday and they can't draw up sales for some reason, then you'd have a good reason to be alarmed.


First of all, do you know if they could have been referring to 360 units as well as the X1 since they did not name the X1 specifically in that quote?

Secondly, it just seems to be alarming considering the sheer volume of such stories.

If this really is not something to be worried about and its relatively normal, it sure is not being portrayed that way. It would be helpful if someone could provide info on why this is not unusual or necessarily a bad sign.

#14 spenser.d

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Posted 27 April 2014 - 22:12

First of all, do you know if they could have been referring to 360 units as well as the X1 since they did not name the X1 specifically in that quote?

Secondly, it just seems to be alarming considering the sheer volume of such stories.

If this really is not something to be worried about and its relatively normal, it sure is not being portrayed that way. It would be helpful if someone could provide info on why this is not unusual or necessarily a bad sign.

 

I bet they have a handle on 360 sales at this point - they probably don't vary much apart from holiday sales so it probably wasn't about the 360.  But scaling production based on sales isn't abnormal.  With consoles, you sell a ton right at launch so you need to produce a ton, but sales don't stay that high forever so you scale production back.  Sony will do the same thing at some point but I bet you won't see an article about it.



#15 spenser.d

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Posted 27 April 2014 - 22:42

As an exercise, everyone's favorite GAF has a thread with some early numbers for 360 and PS3... http://www.neogaf.co....php?p=46324973

 

Take a look at the drop month by month in PS3 sales after it's launch.  Do you think they just kept production super high? No. Were they doomed to fail? No.  Did the 360 have to draw down production as quickly after it's launch? It wouldn't appear so (though they don't show numbers throughout the summer/fall). So what though? Hardly mattered in the end.





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