They were not optimistic but they also miscalculated the demand ratio of X vs S. They though the S was going to be way more popular but now they should have a better idea and they have time to adjust production before the holidays.
Perhaps they miscalculated the ratio (we don't even know truly what that is both in sells and production). Companies rely on their projections. If MS thought they could sell as much as PS or Switch in a similar timeframe they would had contracted ahead of time (to the companies producing it doesn't really matter how much they sell in the end, but how much MS, Sony or Nintendo contracts and for how much). So in their realistic projection MS was expecting something that is about half PS sales (not that they knew exactly what Sony would go for in production numbers, but when both are basically sold out, but one is selling 2x1 at similar prices that to me mean that between both companies the sales projections put PS at 2-1 against Xbox).
This is one of the few times that I actually agree with you. I think they assumed the new consoles would sell either equal or slightly better than the X1 so they planned their production lines accordingly. Now, I have no idea how long does it take for these companies to ramp up production but they said the shortages would last until June, so there is the chance that they might be ramping up production by then. I guess we'll see.
Probably over a year to really ramp up. We can see from the three platforms that hardly there is any big jump in production in the same year, those take a long time to occur because the contracts have been signed with quantities for long period (to also consider discounts), and to make things worse all 3 platforms are kinda supply hungry, miners also making GPUs more expensive/scarce together with smartphones... So all put together we had Sony saying publicly that they would have a hard time ramping up production, so I think same is true for MS. Just look that Sony that releases their numbers had basically just made a forecast of slim passing PS4 numbers aligned for yet another year.
duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"
Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"
Azzanation: "PS5 wouldn't sold out at launch without scalpers."