The Math of Undertracking

[nordlead]

amirnetz said:

nordlead said:

a few things to note.

1) Microsoft is known to really stuff the channel in Q4, and to ship near nothing in Q1 (check financials) just to make it look good for them (remember 10m shipped first wins)

2) Last years sales

VGChartz Hardware data for the period 24th Nov 2007 to 05th Jan 2008:

Console	X360
Total	2,783,488

and with the X360 so far doing slightly above last year, we can conclude that the 2m stock isn't even enough to last 1 month. Having barely enough stock to cover the holiday season is unreasonable. Also, tell that having tons of X360 is bad to the retail stores. The bestbuy near me usually has only 10 units out on the shelves, yet when I went last thursday they probably had 100, with units litering the floor and shelves.

If VGChartz is overtracking Europe, then they must be undertracking somewhere else.

Microsoft overstocked the channel in their first Q4. Indeed there were lots of leftovers in the channel in Winter 2007.

Last year they actually were far too careful and understocked the channel and there was a real shortage of 360s. Several public statements and observations were made to that effect.

They have 6 more weeks to deliver additional units to the channel. There is no good reason for them (or for the retailers) to have 70% of the holdiay turnover already on the shelves. You know, trucks are moving through December as well.

(I will ignore your anecdote. You can prove anything with them)

but they don't have 6 weeks to deliver more goods, they only have 5 days for one of the biggest weeks in the year in NA. And they only have 4 weeks between now and the biggest week fo the year WW. After Christmas, sales continue for 1 week, then typically drop right off.

Also, as a retailer you lose a sale (and sales of the game and extra stuff) if you don't have the console on the shelf the minute the customer walks in the store.

@bugrimmar

when ioi says they have 2 weeks of sales, it means there is enough stock in the channel for retailers to continue to sell the product for 2 weeks. If more stock isn't inserted into the channel before then, then everyone will run out of units.