Is There Really An Xbox 360 Shortage?

Is there really an Xbox scarcity? Some websites are convinced that “the whole scarcity thing is faked to incite demand.” Microsoft CFO Chris Liddell recently said to the L.A. Times that Xbox 360 supply will not catch up with demand until the second half of the fiscal year, ending June 30. Liddell told Reuters that the company expects to see more gradual Xbox 360 sales rather than a launch spike as analysts have predicted. How big of a spike was he thinking?

The original Xbox though not a financial success, changed the way we play games with new innovative features such as online gaming. The Xbox 360 will launch on November 22nd In North America. Microsoft expects to ship 4.5 – 5.5 million Xbox 360 consoles by June 2006.

Here in Canada for example, almost all retailers were sold out of both core and premium bundle pre-order packages. Then last week, Futureshop.ca (online) announces that they will be selling 20 Xbox 360′s online everyday starting at midnight. Of course locations such as Wal-Mart will have units available on November 22nd, but there is debate as to how many they will have. From one retailer to the next, there seems to be a huge discrepancy of information.

Why would a company create the illusion there is a scarcity? Microsoft knows that the media loves a good shortage. Watching people line up at the pumps when gas goes down in price is a perfect example of the power the media have when the word “shortage” is thrown around. Oil company’s have seen record breaking profits this year. Microsoft will of course make a killing in the short run, but by creating the impression that the Xbox 360 is the “hot item” this holiday season, they the want the buzz too carry over well in to the new year – at least until the competition shows up.

When asked when someone will be able to walk in to an EB Games store here in Canada and pick up an Xbox 360, one employee from Brantford Ontaro had this to say “We are talking pre-orders well in to the new year. It probably won’t be until March when you can actually walk in and pick up a new console.” That will be will be almost 4 months after the launch date.

There is no competition right now! The Xbox 360 is going to be the only next-gen console on the market, period, for the next six months at least. The PS3 wont be available until at least early spring. Why not press that advantage now, before real substitutes arrive? Microsoft knows as of right now, the Xbox 360 is the market.

This isn’t the first time we have seen such madness over a new product. The last time we had this craziness was over a toy 1996, with the Tickle Me Elmo Doll. “Tickle Me Elmo” represents an economic truth. When the demand for a product exceeded the supply, the price rose until “the market cleared.” Through the media and incredible timing, the tickle me Elmo doll was the “it” toy of 1996. On November 22nd, will the Xbox 360 create the same maddness?.

Putting economics and conspiracy theories aside, maybe just maybe Microsoft just haven’t produced enough consoles yet do to some sort of glitch. Of course in the manufacturing world, things like this happen all the time. But the discrepancy over how many consoles are available raises many doubts. Ultimately the timing could not have been better for the launch of a new console.

For more great gaming information, check out this great Xbox 360 site or check out this great Nintendo Revolution resources.