Xbox 360 sells out early

Retailers annoyed about shortages of units

By George T. Chronis and Susanne Ault -- Video Business, 11/23/2005

NOV. 23 | Retailers sold out their stocks of Xbox 360s in short order on Nov. 22, the first day of release for the new videogame system.

Lining up ahead of time did little for diligent consumers hoping to walk into a store to buy Microsoft Games’ latest and greatest console. As it turned out, most retailers had far too few units to satisfy even the paltriest of queues.

National retailers such as Circuit City and Best Buy were hard-pressed to get more than 50 Xbox 360 units per store. And even specialty retailers such as EB Games—whose showcase store in Universal City, Calif., started selling the new consoles at midnight—had only about 150 units in stock.

“It sold out in most stores very quickly,” Best Buy spokesman Brian Lucas said.

The supply situation was even worse for smaller, independent dealers. Ron Villarreal, store manager at Game Mania in Los Angeles, said he obtained an unspecified small number of Xbox 360s from multiple distributors, but added the process “was a pain.”

Video Buyers Group president Ted Engen likewise lamented not having enough consoles to go around.

“Our stores didn’t get everything they ordered,” Engen said. “People are under as much as 50%.”

Microsoft is bringing about the same number of Xbox 360s into U.S. distribution as it shipped for the original Xbox in the fall of 2001—1.5 million. But demand is now appreciably higher than then.

Virgin Entertainment divisional merchandise manager Bart Saunt is thrilled with the demand yet unhappy with Microsoft for spreading half of its available units outside the U.S. to Europe and Japan during the next month.

“If [Microsoft] had just concentrated on the U.S., we would have gotten a lot more units,” Saunt said. “They made it more difficult for themselves with a global launch.”

Virgin sold out its Xbox 360 stock nationwide in a matter of hours, with the Times Square location opening its doors to a throng of customers racing to pick up the console.

Liz O’Sullivan, director of marketing at EB Games, said the chain instituted a new program to keep consumers up to date on their preorders. During the last few weeks, store employees throughout the chain have been calling pre-order customers to let them know when their consoles would arrive.

It was unclear how quickly Microsoft can get more units manufactured and into the retail channel.

“We’re working on keeping the supply coming,” Best Buy’s Lucas said.