cleveland122 on 10 January 2007
jkfan87 said:
Sorry, but anyone with even the TINIEST bit of knowledge of any business knows how ridiculous it is to suggest that the 360 had sold about 4.5 million and had an additional 1.5 million shipped. Sorry, but this is not the 1960s and companies simply do not keep that much inventory for ANY product on hand.
A little leson for you, since you all are REALLY ignroant. Any store will not keep more than 1 month inventory. Inventory is the NUMBER ONE cost of a business. Therefore, if a console had sold 4.5 million units in 6 months, there is NO WAY that businesses would accept 1.5 million in inventory. It just does not happen. Not even close.
Seriously...I know this is hte internet where 12 year old kids like to think they can bluff their wauy into looking like experts on every subject, but when you gt called on your bluff, all you do is lose ALL credibility for future posts.
These numbers are wrong...plain and simple.
1. It's very simple. Microsoft is a toy manufacturer. In the toy industry inventory isn't a bad thing. You build up inventory during the year because November and December are much better sales months than the other months. Quick math shows Microsoft has produced 750,000 units a month. Using conservative estimates used by VGCharts sales are approximately 1.9 M for November and December. A time period when 1.5 M units of 360's were produced. No toy company would try to keep a zero inventory system and keep with demand. They would have the cost of excess manufacturing for 10 months of the year, then they would have insane overtime/overhead rates for two months of the year. It's much more cost effective to stay at a constant level and have a slow buildup of inventory during the year.
2. Initial sales projections had Microsoft selling 2.5 M to 3 M for the November and December time frame. It's a goal they were hoping to hit and they shipped enough units to cover this goal. The sales just didn't happen. A price decrease would have done wonders for them.
3. The excess inventory actually costs Microsoft $0. It's a cost for Best Buy, Circuit City, EB Games, etc. As discussed before, sold to retail. It's the retailers cost to sell the unit now.
4. Have you ever been to a store. I live in a tiny city Population approx. (20,000). And I go to Meijer and I've there are over 10 360's sitting there. I went to Best Buy and I saw at least 40 xbox 360's there (I have 2 best buys within 15 minutes of driving). My point? I bet most of time there has been over 1,000 xbox 360's within a half hour drive of me this holiday season. And I don't live near a city that many people have heard of.
