The Xbox 360 began production only 69 days before launch.[77] As a result, Microsoft was not able to supply enough systems to meet initial consumer demand in Europe or North America.[78] Many potential customers were not able to purchase a console at launch. This lack of availability caused Xbox 360 bundles to sell on eBay at inflated prices; some auctions exceeded US$6,000.[citation needed] Forty thousand units appeared on eBay during the initial week of release; this was 10% of the total supply.[79] By year's end, Microsoft had shipped 1.5 million units, including 900,000 in North America, 500,000 in Europe, and 100,000 in Japan.[80]
At E3 in May 2006, Bill Gates announced that Microsoft would have a head start of 10 million units by the time Sony and Nintendo entered the market.[81] Microsoft later specified that goal and estimated shipments of 10 million units by the end of 2006,[82] a target it passed by 400,000 units.[citation needed] As of August 2007, the Xbox 360 has sold 8.9 million units worldwide.[citations needed] As of September 1, 2007, 6.3 million Xbox 360 units have been sold to consumers in the United States,[citations needed] and as of July 18, 2007, 420,000 units in Japan.[citation needed] Although the console had struggled in Japan, it was reported on October 29, 2007 that the Xbox 360 outsold the PS3 for a week in Japan.[83]
During an earnings call in January 2007, Microsoft's CFO downgraded estimated Xbox 360 sales for the first half of 2007.[citation needed] Cumulative sales from the system's launch until June 30, 2007 were predicted to reach 12 million units, down from 13 to 15 million units estimated earlier. Microsoft later announced they shipped 11.6 million units cumulative to June 30, 2007.[citations needed] Being released one year ahead of its competitors, the Xbox 360 was the market leader throughout the first half of 2007. However on September 12, 2007, it was reported by the Financial Times that the Xbox 360 had been surpassed by the Wii in terms of worldwide console sales.[84] On October 4, 2007, Microsoft stated that Xbox 360 sales have more than doubled when compared with the weekly average before the Halo 3 launch.[85]
Based on figures from October 19, 2007, the Xbox 360 outsold the Wii for the month of September in North America, helped in part by the spike in sales seen after the launch of Halo 3, which sold 3.3 million copies in the U.S. in a 12-day period.[86] The Xbox had sales of 528,000 units for September, while the Wii had sales of 501,000 units.[87]
However, despite these sales figures, Microsoft's gaming division is losing money. Through 2005, the Xbox gaming division had lost over $4 billion dollars.[88] However, Microsoft expects the console will start making money in 2008.[89] The losses are due to the market strategy of selling consoles below cost in order to obtain market saturation and gain profits on software and peripherals that have a much higher profit margin.[90][91] Also notable is that Microsoft expects it needs to spend one billion dollars for repairs or replacements of bricked Xbox 360s.[92]
Notes- ^abcd On included video cable. The Elite and Pro versions come with the Component HD AV cable, and the Core version comes with the Composite AV Cable.
- ^ The Elite comes with a separate AV dongle for users using HDMI 1.2 exclusively for video and who need audio from separate cables.
- ^ Due to the Xbox Live December 2007 update, all downloaded content requires an internet connection to be played.
