Retail Availability Varies On Xbox 360 Games, Accessories

The Levittown, N.Y. Best Buy store had copies of all eighteen 360 launch titles in stock Fri. and seemed to have a strong selection of accessories. A GameStop spokesman told us Wed. that 360 software and accessory allocations were “strong” and “in good shape” for his company’s stores (CED Nov 25 p2). Most online retailers Fri. had no 360 consoles but every game and a selection of accessories available.

But the Brookfield, Conn. Target store was sold out of a variety of Xbox accessories including wireless control pads and networking adapters as well as a charger for the controller, store personnel said. It appeared to have an ample supply of wired controllers and additional faceplates for the console. The Target outlet had considerable quantities of many Xbox 360 games but was sold out of Activision’s Call of Duty 2. The store sold $25,000 worth of Xbox 360 hardware, software and accessories in the hour after it opened at 8 a.m. Tues., a department manager said.

The Levittown, N.Y. f.y.e. (For Your Entertainment) store, had only one copy each of three 360 titles: Microsoft’s Kameo: Elements of Power, Madden NFL 06 from Electronic Arts and Activision’s Tony Hawk’s American Wasteland. An f.y.e. employee said her store had received only 3 units of the console at launch. She suggested going to GameStop for a better shot at getting a 360 system, saying f.y.e. didn’t get as many systems because it’s not a videogame specialty retailer. F.y.e., however, offered one of the more innovative Black Fri. offers, giving all its customers a voucher for $10 in free gas with every purchase of $75 or more.

The changing of the guard was clearly evidenced Fri. at the Brookfield Gamestop, where an Xbox 360 console purred along, demonstrating Ubisoft’s Peter Jackson’s King Kong, while a kiosk containing the first-generation Xbox sat silently alongside with its power off. Like other stores in the area, the Brookfield store sold through its initial inventory early Tues. and wasn’t expected to receive new models under after Christmas, a store employee said. Despite the slim allocations of hardware, a nearby Circuit City store was using the 360 as a sales incentive, offing a console free -- when they became available again -- to the salesperson who gets the most applications Thanksgiving weekend for the chain’s credit card, we were told.

Other retailers that reported quickly selling out initial allocations of the 360 console last week included N.Y.’s J&R Music World. A small “Xbox 360 Update” window at top of its Internet homepage Fri. said its allotment of 360s had sold out in a “couple of hours.” It said more supplies were expected “before year’s end.” A Best Buy spokeswoman who said that all the 360 consoles on hand sold out during its midnight launch event in Manhattan later amended that, saying “we sold out of our supply of Xbox 360 units at most stores across the country.”

A single-page “correction notice” taped prominently to the Xbox 360 kiosk in Best Buy’s 23rd St. Manhattan store, meanwhile, said the chain’s Christmas circular erroneously advertised the console on page 20 as including a CD/DVD burner when it doesn’t. It apologized for any “inconvenience” resulting from the error.

Microsoft didn’t respond to requests for comment Fri. about published reports that said some 360 units overheated too easily, or about a “teardown” analysis of the console by iSuppli that estimated Microsoft is now losing about $125 on each 360 console sold.

ISuppli said it “dissected” one of the consoles and found that, factoring in costs for the hard disc, DVD drive, enclosures, a radio frequency (RF) receiver board, power supply, wireless controller, cables, literature and packaging, the total bill-of-materials (BOM) cost for the Xbox 360 premium SKU is $525. The SKU sells for $399.99. ISuppli said “the high BOM cost for the Xbox 360 is not unusual,” noting that game console makers “often market games consoles as loss leaders for more lucrative software and licensing fees.” But iSuppli Mgr.-Teardown Analysis Service Andrew Rassweiler said “the good news for Microsoft is that during the next year, improved yields for the IBM microprocessor and the ATI GPU should save at least $50 per unit, in addition to other cost reductions.”

ISuppli said according to its preliminary findings, the IBM 360 microprocessor costs $106, accounting for 20.2% of the total premium 360 SKU’s cost. It said the IBM chip and other integrated circuits total about $340 per console, with the ATI GPU accounting for $141, the 512 megabytes of GDDR DRAM memory from Samsung Electronics accounting for another $65 and a SiS Southbridge chip costing only about $12. Other semiconductors and electronic components make up the remaining cost of the $370 motherboard, iSuppli said. Unclear Fri. was how much iSuppli believes Microsoft is losing on each $299.99 SKU of the console. ISuppli CE Senior Analyst Chris Crotty predicted IBM will be the big winner of the new console cycle, noting that IBM chips are also being used in the consoles coming from Nintendo and Sony. - Jeff Berman, Paul Gluckman, Mark Seavy