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Forums - Microsoft - Xbox One production may slow down or stop to give retailers a chance to shift inventory

Puppyroach said:
Wasn't Sony's original predictions 5mn shipped PS4 by end of march, and everyone saw that at the time as a great achievement. Sony crushed their prediction, yet MS reach that mark, and people think that is bad? A drawback in production, isn't that quite common for the april-June quarter?

Not sure everyone thought it would be a great achievement but it did at least let us know the benchmark for success Sony was setting itself.  In hindsight, given the actual performance, it looks like quite a soft target.  Therefore from today's perspective it doesn't look that great for MS even though they achieved the target Sony had set.

Yes it's a bit harsh on MS since they are performing well and are still tracking ahead of the X360.  It's just the PS4 has set the new benchmark for success and Xbone can't match it right now, so by comparison it looks bad.  It's not unique to gaming, it's just human nature.  If your football team is having its best season ever that's great, but if they're still trailing far behind their local rivals it's just not going to seem that great after all.



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Post from someone on gaf. Thought id share with you guys.

Baron_Calamity
Baron_Calamity
Member
Today, 12:48 PM, Post #165
For everyone saying this is no big deal, you gravely do not understand modern manufacturing. Before I begin, I'm just talking about manufacturing realities, the console is probably going to be fine. I work in IT for a place that does manufacturing internal and external so I have some perspective on this.

Manufacturing plants aren't just some willy wonka magic fantasy place. Production lines have to be specced, assembled, staffed, and set in motion for a predetermined speed for a predetermined about of time. There isn't a speed adjustment. If you want to produce less of something, its a costly retooling of the entire line. Unless you can somehow fill production arms with similar product, say like Apple did with the Ipad 3 by fitting in the very similar Ipad 2, this is a worse case scenario. This is more costly oops than the red ring of death. Most of the time, when a product isn't selling at the rate it was expected, companies will just warehouse the extra. if they don't sell, then eventually they clearance the inventory out because even warehouses cost significant money over time. Another option is just destroy the extra inventory as it comes of the boat and hope demand picks up so you can stop doing that. Those options are still cheaper than going to the manufacture and asking for less product or even stopping production early.

When a company asks a manufacture to stop or reduce production two things are likely going to happen. The company will have to pay the manufacture for all unproduced units even though they weren't produced nor will be delivered. The manufacture will then charge significantly more to produce any future units at less quantity. They may even be an extra fee on top of that because why not? Also the manufacturer may refuse to work with you on future products



McGran said:
Puppyroach said:
Wasn't Sony's original predictions 5mn shipped PS4 by end of march, and everyone saw that at the time as a great achievement. Sony crushed their prediction, yet MS reach that mark, and people think that is bad? A drawback in production, isn't that quite common for the april-June quarter?

Not sure everyone thought it would be a great achievement but it did at least let us know the benchmark for success Sony was setting itself.  In hindsight, given the actual performance, it looks like quite a soft target.  Therefore from today's perspective it doesn't look that great for MS even though they achieved the target Sony had set.

Yes it's a bit harsh on MS since they are performing well and are still tracking ahead of the X360.  It's just the PS4 has set the new benchmark for success and Xbone can't match it right now, so by comparison it looks bad.  It's not unique to gaming, it's just human nature.  If your football team is having its best season ever that's great, but if they're still trailing far behind their local rivals it's just not going to seem that great after all.

Sony has never used shipped numbers for the performance of the PS4, they did with the PS3 I believe.

That being said, their prediction was 5 million SOLD, not shipped by March. It is April 25 and MS is still sub 5 million sold.



In this day and age, with the Internet, ignorance is a choice! And they're still choosing Ignorance! - Dr. Filthy Frank

If kinect is really the reason they are not in other territories, someone at MS' management accounting department has seriously screwed up.



fps_d0minat0r said:
If kinect is really the reason they are not in other territories, someone at MS' management accounting department has seriously screwed up.





In this day and age, with the Internet, ignorance is a choice! And they're still choosing Ignorance! - Dr. Filthy Frank

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But the X1 is still doing great right guys?



manny10032 said:
Post from someone on gaf. Thought id share with you guys.

Baron_Calamity
Baron_Calamity
Member
Today, 12:48 PM, Post #165
For everyone saying this is no big deal, you gravely do not understand modern manufacturing. Before I begin, I'm just talking about manufacturing realities, the console is probably going to be fine. I work in IT for a place that does manufacturing internal and external so I have some perspective on this.

Manufacturing plants aren't just some willy wonka magic fantasy place. Production lines have to be specced, assembled, staffed, and set in motion for a predetermined speed for a predetermined about of time. There isn't a speed adjustment. If you want to produce less of something, its a costly retooling of the entire line. Unless you can somehow fill production arms with similar product, say like Apple did with the Ipad 3 by fitting in the very similar Ipad 2, this is a worse case scenario. This is more costly oops than the red ring of death. Most of the time, when a product isn't selling at the rate it was expected, companies will just warehouse the extra. if they don't sell, then eventually they clearance the inventory out because even warehouses cost significant money over time. Another option is just destroy the extra inventory as it comes of the boat and hope demand picks up so you can stop doing that. Those options are still cheaper than going to the manufacture and asking for less product or even stopping production early.

When a company asks a manufacture to stop or reduce production two things are likely going to happen. The company will have to pay the manufacture for all unproduced units even though they weren't produced nor will be delivered. The manufacture will then charge significantly more to produce any future units at less quantity. They may even be an extra fee on top of that because why not? Also the manufacturer may refuse to work with you on future products


Quite the eye opener!



When i went to the local Toys R us lately they still had a day one edition for sale



“It appeared that there had even been demonstrations to thank Big Brother for raising the chocolate ration to twenty grams a week. And only yesterday, he reflected, it had been announced that the ration was to be reduced to twenty grams a week. Was it possible that they could swallow that, after only twenty-four hours? Yes, they swallowed it.”

- George Orwell, ‘1984’

Puppyroach said:
Wasn't Sony's original predictions 5mn shipped PS4 by end of march, and everyone saw that at the time as a great achievement. Sony crushed their prediction, yet MS reach that mark, and people think that is bad? A drawback in production, isn't that quite common for the april-June quarter?


no, 5mil is pretty average and expected. Wii U was expected to sell 5.5m by their first april



The article is a bit harsh assuming the "stop" part but the slow down in production and low numbers in Q4 is expected after the massive overshipment these two quarters.

They need to slow down to the units in the stores match the demand before start to ship more units.