Tuesday, December 7, 2010

About those kinect shortages..


Here is the article for those of you who can't get onto GI's site.

Neil Thompson, the general manager for Xbox in the UK and Ireland, has put an end to any rumours that Kinect shortages may have been managed to stimulate demand by making the product appear more sought after.
The shortages, he told GamesIndustry.biz, are entirely down to the vast logistical challenges involved in bringing a new consumer technology product to market worldwide – Microsoft has done everything it can to ensure a continual supply of stock to retailers.
"Anyone who actually works in the business of producing new technology, especially hardware technology, will know that these things are never managed. Everyone else loves to think that they're managed, but they will know it's not. It's a function of coming to market with a brand new innovation and you have to scale up," said Thompson.
Previously, Don Mattrick had warned US consumers to order their Kinect units early to avoid disappointment, as Microsoft were anticipating stock shortages before Christmas.
This led some to believe that Microsoft was controlling the flow of hardware to retailers in order to accentuate demand – an accusation which has also been levelled at both Nintendo and Sony in the past. Thompson, however, made clear that any large-scale technology launch will have to make compromises on available units in order to meet release schedules.
"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. So you're always in this fine balance, saying 'well, we want to give people the product as soon as we can, but you can't switch on the manufacturing like water.' It takes time to scale."
"It's absolutely not a strategy, we want to get the product into consumers hands as quickly as we can because we think its exciting, it's innovative. We wanted to do that for Christmas and that's what we've done. We've built a really strong supply and resupply chain over the coming weeks."
Thompson was speaking as part of an interview with GamesIndustry.biz on the future of the Xbox 360 on its fifth birthday.
Also in the room was UK Xbox marketing manager Stephen McGill, who made the point that Kinect had seen a very accelerated release schedule worldwide, eschewing the staggered strategy which many manufacturers adopt.
"Often consumer electronics companies and games companies have staggered their launches by territory by some quite considerable margins. With Kinect we launched around the world in three weeks. That was a huge task. No region is being penalised," said McGill.
"We're trying to make sure every region has a good amount of stock every week. That can't be underestimated either."

It's a little known fact that retail outlets order a set amount of units to lessen the amount of loss in the case of the product being a dud, and to generate demand of a product in the event of it being successful. When I went to get my copy of The Conduit a year ago, I had to wait until UPS delivered the game and it only looked like they had four copies ordered at the time. There have been other cases of Gamestop and other retailers only carrying a set number of releases until demand is shown.  This makes it even more advantageous for any retailer to basically point out that they are 'selling out' of units'. 

Things are never managed...which is exactly why there's a 500 million dollar advertising campaign for Kinect as well as an additional amount being speculated for Windows phone 7. I know if I spent that much on a launch,  I would want to make sure that the product was a success. Of course you can't manufacture success, which is what I'm sure he meant to say in that blurb. You can manufacture shortages, but success is an X factor, because it depends on how the audience receives the product.

I've read how the Kinect launch and subsequent sales were much like the Wii phenomenon of 2006, but I'm not really seeing it like that. Look at the Ebay pages. There are bids, but not really as wildfire catching as they're being made out to be. Sales figures are obscured thanks to the NPDs so what really do we have to go on other than Microsoft's word (pun not intended) ? We do have VG chartz , but that's not really much of an improvement. The difference between the two releases is that Nintendo didn't exactly know how the Wii would do, and since there were tons of Gamecube units still floating around, one would assume that they released the console in limited quantities in order to safely not fall into the same trap as last time. Once the Wii sold like hotcakes then the demand was created for them to supply more. In this case, however it's not really a matter of  trying to manufacture a similar surprise story of a console being a worldwide phenomenon. I know that Kinect is selling because I see people buying it at work, but for every boast or brag about sell outs and figures I see more units on the shelf compared to units of Donkey Kong Country Returns which has been consistently sold out since Thanksgiving night. And thinking about this only makes me more disappointed that I  didn't purchase the game when I had the chance.

1 comment:

  1. At this point, Microsoft is saying ANYTHING just to avoid having its investors lose their shit.