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Wednesday, January 04, 2006

Did the Xbox 360 really kill Christmas?

Did the Xbox 360 really kill Christmas?

"As the industry contemplates the stark reality of a Christmas season which showed negative growth, many accusing fingers are being pointed at Microsoft. Rob Fahey asks whether the criticism of the Xbox 360 launch is justified.

After weeks of concern over slow sales and price cutting, "the Xbox 360 has killed Christmas" was the stark and accusatory summary of the situation on the High Street in the UK from one owner of a large retailer we spoke to just before Christmas.

It is, perhaps, a slightly melodramatic way of phrasing matters. It's also somewhat inaccurate; it's not the Xbox 360 that killed Christmas, so much as the lack of it, and there were many other factors to take into consideration as well.

The blame for one of the toughest fourth quarters ever experienced by the videogames sector cannot be laid entirely at Microsoft's door. The PS2 didn't get the price cut many retailers had hoped for, the PSP software line-up failed to impress, and Nintendo didn't give the Cube the shot in the arm many had hoped for in the form of Legend of Zelda: Twilight Princess.

Certainly, the Xbox 360 launch has certainly caused more headaches for many retailers and publishers than it has caused jubilation - even to the extent that Electronic Arts fingered the low volumes of the console available at launch as a key factor in its own failure to meet expectations for sales in the holiday quarter, with other firms such as retailer GameStop hinting at broadly the same thing.

Third party publishers, however, are notorious for pointing their fingers at platform holders when the stock market comes looking for explanations for poor performance. Let's not forget that even if the Xbox 360 volumes were lower than expected, most publishers didn't expect to sell that many units on the platform anyway. Their sales have been weak on all other platforms too, and for the reasons for that, they need to look at the quality of their software line-up, the strength of their marketing message and the question of whether they provided anything truly compelling for consumers to spend their money on in a year when consumer spending overall was down at Christmas." [more]

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