Though Xbox 360 hardware shortages since the system's launch are widely known, with the allocations in the U.S. so severe that launch day-style lines cropped up again for the console's second shipment, the precise extent of the shortfall had not yet been known. Now, analyst Tim Klasell of financial firm Thomas Weisel is going on the record with his predictions for overall Xbox 360 holiday shipments.
According to a TheStreet.com report, Klasell had previously expected Microsoft to ship 2 million systems worldwide for the holiday season. But, after analyzing media reports and having "conversations with retailers", Klasell has revised his estimate to only 1.2 million Xbox 360s shipped so far, with 700,000 to 800,000 of those going to the U.S. region, though these figures are still unconfirmed.
However, Klasell still believes that Microsoft will meet its target of up to 3 million Xbox 360s shipped 90 days from the system's November 22 launch, but now thinks that the majority of these will be released toward the end of that period. Should Sony make good on its projected spring 2006 release date, the first-to-market advantage, which Microsoft had been touting as one of the console's major strong points in the coming next-generation battle, could be significantly lessened.
The financial implications of the 360 shortage could actually be good for Microsoft, though, according to the piece; since the system itself is a loss-leader that loses roughly $160 per piece of hardware sold, shipping fewer consoles than expected could have a positive impact on the company's quarterly revenue.
However, the ramifications are worse for software developers such as Electronic Arts and Activision, both of whom claimed a low 360 installed base as one of the reasons for weak holiday sales, as did major video game retailer GameStop Inc.