Microsoft Xbox 360 Sales Plunge 60% As Problems Mount

[Goddbless]

albionus said:

Delta said:

I believe a better interpretation of occam's razor is "The best theory is the one that makes the fewest assumptions." The key difference in this case is that we know MS is redesigning the X360 to be 65nm and we know that they stuffed retailers at the end of last year, thus the only assumption in either theory mentioned here is the intent, which can't be known without an email from MS.

 

Just my two cents.

I prefer "the best explanation is the simplest explanation" for Occam's Razor, which is close enough to what you said (the fewest assumptions = the simplest most of the time). So then which explanation requires the fewest assumptions, ie which is the simplest?

Explanation 1) (mrstickball's) MS planned to overstuff the retail channel as part to of a scheme to clear out inventory prior to retooling for 65nm and an upcoming $1billion waranty extension. That assumes at least 3 things and doesn't answer one question by my quick count, 1) that suppliers are ready for 65 nm, 2) that MS knew when it would move to 65nm 7-10 months at least before it has, and 3) that MS knew 7-10 months ago about the warranty extension and it doesn't why that particular quarter was overstuffed instead of a more controlled draw down of inventories since apparently they knew all this some time ago. Perhaps 65nm didn't come as quickly as expected, but then that would be another assumption.

Explanation 2) (mine) Human nature compelled MS managers to overstuff retail channels to meet their own boasts about breaking 10 million "sold" before the end of 2006. That assumes one thing, that human nature intervened as it has so often to cause humans to make incredibly stupid long term moves for short term gains. It also answers the big question of why the front loaded channel stuffing, they had to get 10 million out prior to Jan 1, 2007 to meet their boast thereby earning their bonuses.

The major difference between the two theories, besides number of assumptions/complexity, is that mrstickball's is a rational explanation for why MS would have done this. My explanation is simply taking the easiest route (hence Occam's Razor) to explain why MS would have done what it did. As such it reduces to one assumption about how humans actually behave, which is often irrationally. You're right that we don't know what the intentions of the managers were but neither do we know whether MS is ready for 65nm or when they decided on the $1billion warranty extension. That's why they are all assumptions.

The reason I can't agree with your explanation is because by the time they overstuffed the channels they already missed their 10million projection. They thought they could catch the folks that were too late to get a Wii or PS3. I'm sure it worked for a few people but not as much as they hoped for.