WeakSales
NEW YORK (CNNMoney.com) - The Xbox 360, a video game console and one of the hottest gifts in 2005, sold out so fast and so early that it may have inadvertently created a drain on the $25 billion gaming industry, according to a news report.
The Xbox, produced by
Microsoft, Inc. (up $0.05 to $26.64,
Research), was released in November and promptly sold out in many stores.
But video game sales tumbled 18 percent that month and two video game goliaths,
Electronic Arts Inc. (down $0.39 to $53.37,
Research) and
Activision (down $0.13 to $13.51,
Research), warned they might miss forecasts for the fourth quarter and next year, according to a
Wall Street Journal report.
The Xbox may be to blame, said the report, because consumers who couldn't get the console in time for the holidays might be holding out on buying games until they can get an Xbox console next year.
Electronic Arts, producer of football game "Madden NFL 06," said on Dec. 21 that quarterly profit and revenue would be "well below" prior estimates, according to a Reuters report, and company executives blamed sluggish sales on Xbox shortages from Microsoft.
Electronic Arts executives said that consumers might be waiting for rival machines from
Sony (up $0.55 to $39.31,
Research) and Nintendo to be released in 2006, said Reuters.
To read more about Xbox-induced video game woes,
click here.
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Looks like Microsoft shot itself in the foot because game sales are the true money maker in console systems. Without the games, it's just a cool looking device for all to stare at. This unexpected miscalculation by Microsoft may benefit the Playstation3 that comes out next year as more gamers have a more compelling reason to wait it out for PS3, which promises amazing graphics and system performance....for a console that is.
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