Xbox 360 - Reception and Sales

Reception and Sales

The Xbox 360 began production only 69 days before launch. As a result, Microsoft was not able to supply enough systems to meet initial consumer demand in Europe or North America and many potential customers were unable to purchase a console at launch. Forty thousand units appeared on eBay during the initial week of release, 10% of the total supply. By year's end, Microsoft had shipped 1.5 million units, including 900,000 in North America, 500,000 in Europe, and 100,000 in Japan.

At E3 in May 2006, Bill Gates announced that Microsoft would have a head start of 10 million units by the time Sony and Nintendo entered the market. Microsoft later specified that goal and estimated shipments of 10 million units by the end of 2006.

Cumulative sales from the system's launch until June 30, 2007 were predicted to reach 12 million units, down from 13 to 15 million units estimated earlier. Being released one year ahead of its competitors, the Xbox 360 was the market leader throughout the first half of 2007; however, on September 12, 2007, it was reported by the Financial Times that the Xbox 360 had been surpassed by the Wii in terms of worldwide home console sales.

On October 4, 2007, after the launch of Halo 3, Microsoft stated that Xbox 360 sales had more than doubled compared to the previous average. According to the NPD Group, the Xbox 360 outsold the Wii for the month of September in the United States, helped in part by the spike in sales seen after the launch of Halo 3, which sold 3.3 million copies in the U.S. in a 12-day period. The Xbox had sales of 528,000 units for September, while the Wii had sales of 501,000 units.

Despite the relatively strong sales figures, Microsoft's gaming division was losing money. Through 2005, the Xbox gaming division had lost over $4 billion, however, Microsoft expected the console to start making money in 2008 due to a loss leader market strategy of selling consoles below cost in order to obtain market saturation and gain profits on software and peripherals with a much higher profit margin. Additionally, Microsoft took a charge of $1 billion dollars on its June 2007 income statement to account for the cost of replacing bricked Xbox 360s.

In Europe, the Xbox 360 sold 2 million units in 2006 and 1.9 million in 2007 according to estimates by Electronic Arts. In 2007, the Xbox 360 sold 4.62 million units in the U.S. according to the NPD Group, and 257,841 in Japan according to Enterbrain. In 2008, the Xbox 360 sold 317,859 units in Japan, according to Enterbrain.

On February 13, 2008, Microsoft announced that the Xbox 360 suffered shortages in the U.S. in January 2008, possibly continued into February. Prior to the release of the NPD Group's video game statistics for January 2008, the Xbox 360 was in second place behind the Wii in U.S. sales for most months since the Wii and PS3's release. On May 14, 2008, Microsoft announced that 10 million Xbox 360s had been sold and that it was the "first current generation gaming console" to surpass the 10 million figure in the US. In the US, the Xbox 360 was the leader in current-generation home console sales until June 2008, when it was surpassed by the Wii.

In the first seven months of 2008, the Xbox 360 has sold 154,000 units in Canada, being outsold by the PlayStation 3 and Wii; the Xbox 360 has sold a total of 870,000 units in Canada as of August 1, 2008. In Europe, the Xbox 360 has sold seven million units as of November 20, 2008, according to Microsoft. In Japan, the Xbox 360 has sold 866,167 units as of December 28, 2008, according to Enterbrain. In the United Kingdom, the Xbox 360 has sold 3.9 million units as of June 27, 2009, according to GfK Chart-Track.

On May 13, 2008, Microsoft stated that there will not be a release of a newer version of the Xbox 360 in 2009. Microsoft representative says, "While we don't normally comment on rumors like this, we can tell you that we have no plans to release a new console in 2009".

On May 28, 2009, Microsoft announced that sales have surpassed the 30-million unit-mark, stating that 2008 was Microsoft's "biggest year in history" also due to the increase of Xbox Live users.

On January 6, 2011, Microsoft stated that the Xbox 360 sold over 50 million units worldwide during their CES 2011 conference. In addition, they stated that the Kinect sold about 8 million units, 3 million more than initially predicted, during the product's first 60 days on the market. It was also announced that Xbox Live had more than 30 million users, making 2010 the best year to date for the online service.

Edge magazine reported in August 2011 that initially lacklustre and subsequently falling sales in Japan, where Microsoft had been unable to make serious inroads into the dominance of domestic rivals Sony and Nintendo, had led to retailers scaling back and in some cases discontinuing sales of the Xbox 360 completely.

In 2009, IGN named the Xbox 360 the sixth greatest video game console of all time, out of a field of 25.