What should interest everyone more then the profits is the number of units in the channel. Profitability on the division was very likely for various reasons. I suppose we know one thing for sure now. There is no massive money pit in there anymore. The division will probably post profits for the rest of the year unless Microsoft rolls the dice in a big way.
What we should pay more attention to is the channel. I said it a couple weeks back that Microsoft would only have about a million units available in the channel for Grand Theft Auto IV. We know they cannot be as high as nineteen and a half otherwise Microsoft said nineteen and a half. So even if the numbers were worked out last week. The number may be as high as an additional one hundred and fifty thousand. So factor in another week and you have perhaps a million.
Spread across three markets that might be just under half a million units available for both North America and Europe. Given that Halo 3 moved one hundred and fifty thousand units during launch week, and followed that tempo for four weeks solid, and saw a real plateau. We can see that Microsoft might suffer real supply constraints near the tail end of next month.
That is what should interest whether Microsoft will be able to keep up with the demand, and that might say a lot for the month of June which will have to be a rebuilding month. Microsoft would have been better served with two million in the channel.
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