Microsoft: Kinect shortage is not a strategy

[Emil]

Ever since the Kinect motion controller launched, there have been rumors that the reason it is selling out in stores is because Microsoft made it so. Supply has been clearly lower than demand. Many have speculated that Microsoft managed the shortage by giving the impression that the accessory was a hot item because it was sold out. Microsoft has spoken out against the rumors, saying that the shortage in stores really comes down to logistical challenges that are common with all new technologies.

"The choices you always have are: do we launch in November or do we wait until February, March when we could hit some bigger launch numbers but then we miss Christmas," Neil Thompson, the general manager for Xbox in the UK and Ireland, told GamesIndustry. "It's absolutely not a strategy, we want to get the product into consumers hands as quickly as we can because we think it's exciting, it's innovative. We wanted to do that for Christmas and that's what we've done."

Three weeks ago, Microsoft was celebrating that it had sold 1 million units of the Kinect in 10 days. Last week, the software giant announced it had sold 2.5 million Kinect units in 25 days. In other words, the overall momentum is something like 100,000 Kinects sold each day, and that's before the 2010 holiday season. Microsoft's goal is to sell 5 million by the end of the year.

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https://www.techspot.com/news/41443-microsoft-kinect-shortage-is-not-a-strategy.html

 

[madboyv1]

Reminds me of the Wii craze to a lesser extent back in 2006, though I am speculative of any lasting impression as an XBox360 add on. I am excited about the hype it is generating as it is being used on the PC however.

 

[TomSEA]

There will be plenty of these available on e-bay next summer when the novelty wears off.

 

[Johny47]

I'm not bothered because right now there's only one good game for Kinect and that's Dance central(I'm not even a dancer, just looks good fun =/) but I think Microsoft thought it wasn't going to sell that well, it shouldn't really because of the price and serious lack of good games but the tech is good so well done to them for that.

 

[Vrmithrax]

Seems typical, you would think these electronics guys would figure it out!

Throw a ton of hype into your product (Kinect, Move, etc), release it conveniently before the major shopping holiday, perform a massive advertising blitz, then wonder why demand is outpacing supply. Really? Marketing geniuses for those companies can't figure it out? Particularly when it happens year after year to at least 1 or 2 "must have" products?

Or maybe it just shows a severe lack of confidence in the product's adoption, that they don't to chance having a surplus of inventory.

 

[jgvmx]

Maybe not a strategy but a logistical challenge that worked out pretty well. Now it's time to wait for the good games to come for it, if they ever will.

 

[aj_the_kidd]

I doubt it was strategic, they just underestimated kinects popularity, which is funny because the over estimated the windows 7 phone popularity.

I do agree with the comment that there will be plenty available next summer on ebay

 

[Guest]

Vrmithrax, nowhere in that article were they wondering why demand was outpacing supply. They know that the demand is high for it, but they can't get it from the manufacturer fast enough. Maybe you need to read the whole article before you post.

 

[PC nerd]

To be honest, it is hard to trust anything Microsoft say nowadays.

When everyone eventually realises that Kinect is as crap as most other M$ products, Ebay and Amazon with be filled with used Kinect devices.

 

[Vrmithrax]

Guest said:
Vrmithrax, nowhere in that article were they wondering why demand was outpacing supply. They know that the demand is high for it, but they can't get it from the manufacturer fast enough. Maybe you need to read the whole article before you post.

Oh, I read the article, and I still stand behind my comments.

Going to market with a hot new product and not ensuring that you have proper manufacturing to meet demand is exactly what I was referring to... They drop these hot products, and THEN seem to decide to try to figure out how to manufacture enough to meet market demand. The only reasons for shortages to occur are: A) complete lack of faith in your sales numbers resulting in a massive underestimation of demand; B) throwing a new product to market before you have the logistical supply infrastructure locked down to meet your expected demand; or C) a deliberate marketing ploy to make your product seem like the "hot new product" of the year. Since Microsoft swears it's not C, it has to be A or B, or some variation of the 2. If they truly had a goal of 5 million units by year's end, they probably should have started out making sure they could meet that goal.

As I said, it happens every year to at least a few products, and it's like nobody learns lessons from the previous debacles. In the end, the ones that really profit in the whole deal are Ebay and opportunistic resellers.

 

[Guest]

Thats nonsense. What would a company do? Produce 10 million units of a product without knowing what the demand will be? Do you assume its so black and white that you can go out to the public, canvas a survey and then say "aha, because of this survey we know that we will sell 10 million units".

They can't get a good impression of the demand until they take pre orders and you can't take pre orders until you actually have a commitment to the manufacturers. And that commitment can't be "well if the pre orders spikes can you guys make sure you double the workload of your manufacturing staff and get us another 5 million before xmas, thanks". There are probably conditions where you can request more units produced at a particular price but you can't tell a manufacturer you want twice the supply with just a month or two notice. the only way you can make that work without shooting yourself in the foot is to have conservative estimates until the product is a runaway success.

 

[Guest]

I understand. Worldwide launch logistics and delays in manufacturing are common in the industry and even an "unspeakably vast corporation" like Microsoft may find it hard to get their acts together when it comes to these things. I don't believe the shortage is planned. Why would it be? Not, when the prime beneficiary is the competition. The last store I visited, a slick sales rep almost talked me into buying a PlayStation-Move instead.

As it turns out, I have a budget of $200 for the holidays which I intended to use toward the purchase of a Kinect. But I am being told, one store after another, that they are all fresh out of Kinects. I am also being told that I can buy a complete new Xbox-Kinect bundle instead if I am interested, one salesman even lied to me and told me that the Kinect would not be compatible with my xbox 360 super elite.

If you ask me, the whole thing is a lot ado about nothing, and not worth my wasting anymore of my time. I think there are plenty of other things I can buy in the world for Christmas with $200 other than a Kinect. Furthermore, I am not sure that the technology is all that it could be yet (I tried the in-store demo and lag is a problem: it exists and is seriously noticeable). So, maybe, I'll try again in a year and see whether Microsoft got their act together. Unless some sales rep manages to talk me into purchasing another system before then. It's a large world out there.