GameTavern - MS banking on huge 360 sales

http://www.cnn.com/2005/TECH/fun.gam...eut/index.html

Quote:

LOS ANGELES, California (Reuters) -- Microsoft Corp. on Tuesday said it expects to sell as many as 3 million Xbox 360s in the first three months after its launch -- a strong start in its battle to dominate the market for next-generation gaming consoles.

Some big retailers in the United States have stopped accepting early orders for Xbox 360.

Microsoft will be the first of the three major companies to launch a new console when the Xbox 360 hits store shelves on November 22. Sony Corp.'s PlayStation 3 and Nintendo Co. Ltd.'s Revolution each are expected sometime later in 2006.

Microsoft is aiming to sell 2.75 million to 3 million Xbox 360 units in the first 90 days after the launch date, Xbox Chief Financial Officer Bryan Lee told an investors' conference in New York.

The company set that target nearly two weeks after trying to play down industry expectations. At its latest earnings announcement, it warned that initial Xbox sales might not be as high as some in the gaming industry have expected.

But analysts said the new 90-day sales figure was probably still low, given that the Xbox 360 will not have a direct competitor this Christmas and that it will be accompanied by a rich line-up of games.

"The 3-million-unit number that Microsoft quoted today is extremely conservative," said Rochdale Research analyst David Eller.

Lee also said that sales of the new consoles, games, peripherals and online gaming subscriptions should total about $1.5 billion in the same period.

"In GameStop stores, the reservation process is closed," said Chris Olivera, a spokesman for GameStop Corp., the biggest U.S. video game retailer, adding that advance orders at GameStop's recently acquired Electronics Boutique stores were due to close "relatively soon."

Best Buy Co. Inc., the No. 1 U.S. electronics chain, said on its Web site that it had stopped taking orders for the Xbox 360.

The figures released on Tuesday are "a good signal about the overall health of the business," Microsoft's Lee said in an interview ahead of a presentation at the Harris Nesbitt Media & Entertainment Conference.

The 90-day sales target totals more than half of Microsoft's target of selling between 4.5 million and 5.5 million Xbox 360 consoles during the current business year, which ends June 30, 2006.

Lee, the CFO of Microsoft's home and entertainment group, declined to say how many consoles would be on retailers' shelves on November 22 when the Xbox 360 launches, saying that Microsoft would have enough machines for a solid release and steady supply thereafter.

Microsoft has contracted with three electronics manufacturers to build the Xbox 360: Flextronics International Ltd., Wistron Corp. and Celestica Inc. The Celestica plant is expected to come online in early 2006.

Redmond, Washington-based Microsoft's Xbox 360 will debut at least three months before its main rival Sony begins selling the PlayStation 3, the gaming industry leader's next-generation console.

Current-generation Xbox sales have slowed ahead of the launch.

Microsoft had cautioned on October 27 that early Xbox 360 sales would not be as high as expected.

But analysts noted that Microsoft would benefit from avoiding a big sales spike after the launch. Disgruntled customers were a problem for Sony when it launched its best-selling PlayStation 2 console in 2000.