

In a trend where success can be its own defeat, rumors are spreading that Microsoft might be facing a shortage of their Xbox 360 consoles and Kinect peripherals. In an article on VentureBeat, they examine the total number of units shipped and produced in yet-another-logistics-beatdown for the software giant.
Microsoft saw huge demand for the Xbox 360 and Kinect after the Nov. 4 launch of the motion control system. To deal with that, it pulled production of consoles that were previously planned for January and February, said David Dennis, a spokesman for Microsoft. The company found ways to expedite the shipments of Kinect systems directly from manufacturing to retail locations, for instance, in order to replenish the systems that were being sold out.
In its first 60 days or so, Microsoft shipped 8 million Kinect systems to retailers. Most of those sold through, as spot shortages appeared in late December. Now, Microsoft has the same problem that Sony had a year ago when it saw high demand for its slimmer PlayStation 3 console. But Microsoft’s position is a little more severe since Kinect sold so well and because the slimmer version of the Xbox 360 has been selling well since its introduction in June. Microsoft said today that the the Xbox 360 sales were up 42 percent for the year, and in December the company sold 1.9 million consoles.
Explosive sales gripped Microsoft when Kinect came out to the tune of 2.5 million in less than a month accounting for over 40% of the market for November in Xbox 360 sales. This momentum certainly didn’t flag when the winter shopping holiday’s rolled around and Microsoft responded in kind by making sure that every shelf was stocked with their flagship console and peripheral and for all intents and purposes they made it without a hitch. It certainly wasn’t like another Wii—whose shortage had my friends and I scouring local Walmarts and interrogating retail managers as to when their next shipment might come.
To date, over 8-millon Kinect units have been shipped, and production continues for both Xbox 360 and Kinect. However, with the sudden shift in production instead of seeing units dry up on the shelves in December, we’re seeing it now.
Managing popularity has always been the bane of retail production and we’ve seen it with both the release of the Wii by Nintendo and the PlayStation by Sony. Microsoft may not be able to maintain with the current level of demand, but at least they made it through the gauntlet surge that the shopping holidays bring.
However, now that all that is over, they might not have the remaining production capability to keep up with continuing high demand.
This is actually still pretty good for Microsoft, they might lose out on a few sales, but it does mean that they’ve produced something so popular that people can’t purchase it from them fast enough.
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