Xbox 360 - How to F--- up a system launch

Several thoughts as I continue to wait, hoping, for an eventual call to come to the local EB Games store and get the Xbox 360 that I have already paid for, but haven't received yet thanks to an abundance of demand, and a very underwhelming amount of supply.

If it wasn't obvious before, with profiteers making scads of money on systems they resold on eBay, then perhaps recent news of a potential class action suit over issues such as over-heating, systems that scratch discs, and other similar problems (see original PC World article here: Customer Claims Xbox 360 Defective Microsoft denies widespread glitches alleged in class-action complaint.) should be enough to convince the world that Microsoft royally F---ed up the roll-out of their newest gaming console systems.

You may be wondering how I've come to that conclusion, or more importantly, how many ways I might be able to (and you along with me) count as to how they screwed up. That's what this message will try to help decide for us all.

First, duh! Not enough supplies to meet demand. Microsoft obviously felt pressure to set a release date for a system that was obviously coming before Christmas. The existence of the system, the fact that it was "done", the hardware was golden, the development tools frozen for release, and the rest of the signs were all set. With things so clearly pointing to a system launch before the end of the 4th quarter of this year, more importantly before Christmas, and well enough before Christmas to count on a significant number of sales in the quarter, Microsoft virtually had to put out the system or face an even tougher competition, and perhaps a lot of buyer hesitation from customers that might be leaning towards buying a Sony Playstation 3 instead. Waiting until even early in the New Year might have let a lot of potential buyers sit on their money to wait to see what the PS3 could do that perhaps the 360 couldn't.

The problem with any facts behind all of this conjecture and the current situation is that unfortunately Microsoft has so badly supplied the market that a lot of money will wind up on the sidelines. In fact, a lot of money that was supposed to go towards a 360 may wind up simply being shifted into a pre-payment or major deposit on a PS3 in the hopes of avoiding the types of problems that people had in obtaining a 360. The thought has crossed my own mind. Take my pre-payment for the 360 money and have it all moved right over to a pre-paid PS3. At least with that system (targeted for May 2006 or somewhere close to it) I'd be ordering early enough to pretty much guarantee getting one.

Secondly, the problems that are noted in the article referenced in the link early in this article. Over-heating, systems that scratch discs, systems that can't play through a complete game, and other issues are giving Microsoft and the 360 a black eye. Even as I wait for the opportunity to get the system I've paid for, I'm reading of other gamers that are experiencing serious problems with using the systems they got. It has me thinking I should just cancel the order completely, or fearful that when I do get a system I'll have the same problems and be stuck with a dudd. Given the percentages of people reporting problems, and the fact it's not a small number, I have to figure that Microsoft had design flaws (which is part of why the person in the originally linked article is going for class action suit status) or at least I have to figure that Microsoft didn't do enough testing/quality assurance work on the systems or the discs, or whatever the problems are coming from.

Third, the staged world-wide roll-outs of the systems were a huge mistake. I know that this is part of a situation that Microsoft can't win. If they roll-out worldwide at the same time as they roll-out in the U.S.A. they potentially take systems that could have sold here in the U.S.A. away from buyers and yet if they don't roll-out at close to the same time, they alienate the customers in the other countries, especially if they make some countries wait a lot longer for the official release of the systems there. They would potentially cause customers in other countries to buy U.S.A. destined systems to import into other countries, making those customers pay a lot more for an "imported" system bought via eBay or some gray-market importer/exporter.
Yet there's a big problem with the current staged roll-outs in other markets -- again, it seems to most customers that Microsoft is providing systems to Asia even as customers in the U.S.A. go without and are desperately waiting. Why should Europe or Asia get the systems when Microsoft hasn't met demand here in the U.S.A.?

Fourth, Microsoft botched the pricing point for the systems. They priced them too cheaply, or at least lower than they should have given the demand and the lack of supply. Again, this is perhaps an unwinnable situation for Microsoft. If they priced the systems higher, they could potentially reduce the (reportedly) approximately $130 per system that they are losing on every system they sell. If they did price the systems higher they'd probably lose a few customers, or at least have a few customers delaying the purchase of the system for a while. That could be a good thing, given the abundance of demand for the systems, but what happens when we get closer to the release of the PS3 and Microsoft cuts the prices back down to current levels. Any time they reduce the price they make earlier purchasers angry because those purchasers paid the higher original price. They might resolve that by using a rebate system for a while, but it still angers early adopters, and people (especially like me) get mad at rebate systems while having to wait for the money.
Still, the smart plan by Microsoft might have been to price the boxes about $100 more than the current prices during the 4th quarter of CY2005 and early into 1st quarter of CY2006. Drop the prices around President's day (just in time for the major sales), or introduce the rebates then. Perhaps even just switch the system bundles a bit so that the purchase price of the systems include a full year subscription to Xbox Live or something similar, anything that makes the systems seem to be a bit lower priced and a better bargain as the PS3 starts getting hyped. Then drop the price a bit more about 90 days later, as the PS3 starts getting closer and closer to release. Each price drop would be another cut into Sony's bottom line as Sony would have to be very wary of the price of the 360 as the main competition for the PS3.

Anyway, those are my thoughts as to how screwed up the launch of the Xbox 360 has been. There may be other thoughts to add to the discussion here, so please feel free.

gaming

Locked Post

Advanced Search

Watch this post

Do not email me updates for this post Email me updates for this post

Successfully updated karma reason!

It was almost a vaporware release! (judging by how many were available here)
I figure that at least 60-70% of the problems were operator induced but I wonder about the so called "release plan" that Microsoft had for this piece. It makes me glad I am a PC gamer and not a console guy.

Successfully updated karma reason!

It was almost a vaporware release! (judging by how many were available here)

I don't think you are far off at all in that label. One of the Microsoft mouth-pieces has said that Microsoft has had plans for resupplying the systems, and that the systems are supposed to be hitting the shelves in stores on a regular basis. Unfortunately that plan, if such existed, seems to have fallen down faster than Ted Kennedy at a wedding with an open bar.

Searching the net for Xbox 360 restock or Xbox 360 resupply gets a bunch of discussion about whether any resupply has happened, and no confirmations of any additional shipments coming into any stores.

There's some conspiracy discussion where a few potential customers have "heard" from a friend of a friend or something similar that one store or another has gotten a few units in resupply shipments and employees in the stores bought the units themselves and then flipped the systems on eBay for a big profit and a sort of "home grown" Christmas (some might say Xbox-mas) bonus. I doubt those stories are really true, but if they are, I hope that Microsoft terminates the retailers status as an official reseller of the boxes. Of course, such a story gains some legs when you don't see or hear of 20 - 30 systems at a time coming into a store.

There's also been rumors that December 18 - 19 (weekend?) is supposed to see a big sale at Best Buy and that Best Buy has been ordered to horde units until then so they can have supply for the sale that is already pre-planned. Again, not guaranteed to be true, but could be.

I figure that at least 60-70% of the problems were operator induced

Not having one of these systems currently, and not having experienced the problems first hand, I can't say for sure that any problems exist, or that those that do aren't as you suggested -- operator induced.

I will say that I would not be surprised by heat related problems. The types of chips that are reportedly inside the 360 are cutting edge, faster processors available, faster graphics processors, etc. Heat has long been an enemy of PC manufacturers, and console systems combined. It's part of why the original Xbox was so huge. There had to be plenty of ventilation to keep the systems cooler and more stable.

Look at modern pc's and modern pc gamer's video cards. Fans abound in them, there to keep the chips on the cards cool enough to stay stable. If the fans sieze up or get clogged by dust, the cards literally cook themselves and the systems fail, the graphics get blotchy, streaky, break up, etc.

In a system that is as compact (slim-lined) as the Xbox 360 is, there's not a ton of room to allow for a lot of ventilation, and that could be causing some of the problems that were reported.

but I wonder about the so called "release plan" that Microsoft had for this piece.

As do I. (Hence the origin of this article). Whatever their plans were, I think they missed badly.

Again, I expect they really did need to hit the Thanksgiving week target date to get a jump on the Xmas sales. If they had waited longer, they'd have potentially missed a lot of sale time. The problem though has been that they've missed that time anyway, since they obviously don't have supply enough to meet demand. And to me, it might have been smarter to have missed the Thanksgiving week in order to run factories for at least another week or two and just use the entire month of December, or at least the 24 days leading into Christmas to make the sales.

Successfully updated karma reason!

Hoping to score a few points with the morning gamers!

Successfully updated karma reason!

One of the problems that people are having with the overheating issue is that they are playing eith the 360 laying flat instead of standing upright tower style... the Local EB's display case is flat and they had to install several different fans to keep the display model running inside it... (it works fine when they take it out and stand it up so that the ventilation works the way it was intended too though)...

Successfully updated karma reason!

Aha! I was correct in assuming that at least a good portion of the problems were operator head-space and timing!

Successfully updated karma reason!

Looks to me like business as usual for M$.

Here's an article that postulates the exact opposite. [link]

I don't know. I think the last gaming system I bought was the 8-bit NES.

Successfully updated karma reason!