Where is the X360 production bottleneck?

[Hardknock]

If stores had extra x360's sitting on their shelves, then people would be complaining that M$ failed with this launch. All of the media outlets would be reporting about how easy it is to get an x360 and that it's a sign that most gamers are waiting for the PS3. I'm sure there is no bottleneck and M$ sent retailers exactly what they wanted to send them.

Do you have any idea of how many pre-orders weren't fulfilled? How many people that camped out and were disappointed they couldn't get one? Thinking that MS intentionally held back units is retarded. The more they sell the better their sold-through numbers would be, which would generate huge positive press.

 

[Gholbine]

Even suggesting that shipping is the problem is plain idiocy. If it is distribution that's holding up Xbox 360 sales, then there's a boat out there with a large number of units on it just waiting to be sold, and Microsoft is stupid for not sending it a couple of weeks earlier. If not, then there's lots of boats out there with small numbers of units on them, in which case, it is production that's the problem.

 

[Zaphod]

Microsoft plans 300,000 Xbox 360s at Europe launch. That doesn't sound like too many, so I'll expect shortages in Europe before Christmas as well. Their earnings report CC last month stated that they expected to sell 2,5-3 million units before the end of February and up to 5.5 million by the end of July - along with something about expecting a ramp in production early 2006. Final units have reportedly been in production since August, and current production is stated as tens of thousands each day.

Sounds to me like they're making about as many as they expected to, which of course may be fewer that they would like to be able to.

 

[Tap In]

Yes. The Xbox 360's are being shipped by air, not ... ship. How long that will last, we don't know. The supply problem is definitely production.

I disagree

it's not a supply problem it's a demand problem.

they are launching in 3 major markets. systems are being produced and shipped from 2 factories in the tens of thousands per day.

shipments are flowing every week to retailers all over the world.

 

[Tap In]

snip...

Sounds to me like they're making about as many as they expected to, which of course may be fewer that they would like to be able to.

exactly

 

[DarkRage]

Systems are manufactured between October 1st and November 12th, according to an informal survey in gaming-age forums. Which means that at least some of them (all from November) were deliveried by air. I guess the other ones were delivered by ship.

It is hard to believe that the bottleneck, and of course there IS a bottleneck, is in something standard as a hard drive.

I would point to the CPU, but I have not got a smoking gun to support it. Comments from Microsoft a couple of months ago poiting to the "silicon", dev kits running at 2.8GHz, massive heatsing and overheated problems, speed of the Cell prototypes... And of course, IBM's track on availabity of their CPUs. Not 100% sure of course, but it makes sense.

 

[AlphaWolf]

and of course there IS a bottleneck

Because you say so? or do you have any actual evidence. I see people saying this in the thread, yet no one has provided any numbers suggesting that MS has gotten less units to market than expected. Do people believe that there is a problem in production simply because demand is exceeding supply?

 

[jvd]

we started getting units in 2 weeks before launch. So i'm sure they were moving by sea and air . You can ship alot more stuff , alot cheaper by water than air .

So i'm figuring half the inital usa shipment was by air. However in the weeks following it will switch to being full water .

 

[[maven]]

Because you say so? or do you have any actual evidence.

No, because there always is a bottleneck when producing / shipping something. That is a simple fact. It's not meant as an accusation.

 

[Platon]

I really don't get why the launch is a failure? Because there are more people that want a console than there are consoles available? Was the PS2 launch a failure then as well? And that launch wasn't even a wordwide one. How long should they wait with the launch, till they have 10 million consoles waiting to be shipped in a storage room collecting dust?...

 

[rabidrabbit]

Launches are always failures. If they lose money, it's a failure.
If they can't satisfy all the customers willing to buy, it's a failure.

Launches are always a succes if you listen to PR.
Launches are always a success if the store manages to sell out their limited supplies.

The true success comes later

 

[Agisthos]

Okay, saying MS has had a failed launch is a too harsh choice of words.

But lets be realistic - MS has poured much more resources into the X360 than the original xbox, and unlike the first xbox they seriously want to take 1st spot in this console war. So cutting the launch allocations and giving large wallmarts only 10 units, making stores stop preorders because they cant fullfill shipments, launching with only 300k in europe e.t.c

This should have been thought out much better and seems dissapointing.

DarkRage has some good points there.

 

[Shifty Geezer]

I was in GAME on the weekend and asked about when they were getting XB360 demo kiosks. They guy said they should have been a couple of weeks ago, and had only supplied GAME with 17 kiosks. I don't know if that was for the Southeast of England, all of England, or what, but with only days to launch and no demo kiosks despite supposedly intending to ship them weeks ago, it seems to me there is something of a shortage below MS's expectations. That 300k story certainly points to as much.

Still, I asked this question earlier and got some grief for it...

 

[London Geezer]

HMV in Oxford Street has 3 pods running boring demos and videos. That 23" screen looks so cute.

 

[Shifty Geezer]

I think there's a few kiosks in key places/towns. Certainly it's not widespread in the SE of England, which being the most densely populated and most affluent part of the country shows that there aren't a lot spread around. Or maybe there was just a dire cock-up in the distribution and the 500 SE England demo kiosks have found their way to the Orkney isles??

 

[standing ovation]

Well... it would be my opinion that if there was to be a bottleneck in the production of XBox360 consoles it would be in the production of the processors that goes into the system.

That sounds reasonable enough. After all, it was a dubious supply of chips that sent Apple running to Intel!

There ARE more systems (overall) available at the launch of the XBox360 than there was at the launch of the PS2, now why does it seem that much worse now? The answer is simply that there are more stores today than there was then... meaning the more stores that you have the fewer each individual store will recieve on that launch point. So even if you have the same number of systems launching each store still gets less because you are sending these systems to more stores.

Now, if I remember correctly, PlayStation 2 was in short supply because Sony insisted on running the operation from Japan, which, at the time, had stumbled into a recession, being drug there by an Asian semiconductor industry on hard times. As a manufacturer, Sony's chief problem was getting the ball rolling.

The Xbox 360 shortage seems a lot scarier because, deep down, many of us still question Microsoft's ability to produce product without doing more of its design and manufacturing in-house. Like Apple, the company's core game business hinges on the performance of its vendors.

 

[AlphaWolf]

Okay, saying MS has had a failed launch is a too harsh choice of words.

But lets be realistic - MS has poured much more resources into the X360 than the original xbox, and unlike the first xbox they seriously want to take 1st spot in this console war. So cutting the launch allocations and giving large wallmarts only 10 units, making stores stop preorders because they cant fullfill shipments, launching with only 300k in europe e.t.c

This should have been thought out much better and seems dissapointing.

DarkRage has some good points there.

Large Walmarts got more than 10 units, the ones near me had over 40 each.

I am not sure why you are blaming MS for some idiot in EB taking way too many preorders...

I'll ask again, do you have actual numbers for units shipped? Or is your evidence anecdotal? (ie some dipshits complaining on a forum)

 

[Bill]

The bottleneck is obviously the silicon. CPU and GPU, namely.

The Hard Drive rumor is interesting though. But you could always ship more cores.

 

[Carl B]

The Hard Drive rumor is interesting though. But you could always ship more cores.

And that is exactly why I think it is the hard drive. Because they are shipping more cores relative to their initial 85/15 split; not only that but the hard drive peripheral, which *every* core owner out there right now would love to buy, is simply not available, sometimes being back ordered for months.

So, for me, hard drive...

In that 'MS customer service' thread I posted in last week, an MS service rep mentioned MS as having issues with some hard drives specifically, so it just stood out to me overall.

The bottleneck could be anywhere, but whatever the case, they could use more hard drives than they have at the moment.

PS - Demand exceeding supply by no means constitutes a 'failed' launch - in fact the opposite in my mind. But the taste the public is left with post-launch will determine it, and right now that taste is not wholly sweet. Now it's too early to judge - we'll need to wait a month or so and gauge where 360 hype is then vs right before the launch to see how successful MS' launch attempts were. I'd say some of the wind has gone out of the hype though, for sure. Might rebuild though as the 'noise' from individuals with defective units dies down though.

 

[Shifty Geezer]

The problem isn't launch impact but getting a user base. If you sell 1 million units in the first day, and then 20,000 a month forever after, you're in trouble. 300,000 units for the whole of the EU after several months of manufacturing. That implies maybe the EU gets 100k units a month. If MS can't increase that substantially, they won't have a substantial lead on PS3. When PS2 had supply troubles at launch, were the reasons publicly known? If MS are hitting a bottleneck somewhere is there any likelihood they'd make an official announcement?