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Reduced 360 target causes VG stock dip

Resulting from Microsoft's lowered shipment target for the Xbox 360, several video game makers saw their stocks fall today. THQ, Take-Two, Electronic Arts, and Activision have all dropped, with THQ falling the farthest (4.7%). The stock drop comes after Microsoft announced that it had reduced its Xbox 360 shipment targets from 13-15 million units to 12 million units. Analyst PJ McNealy notes, "There is investor concern about a re-set of expectations around both the Xbox 360 and the Sony PlayStation 3."

We find the all around stock decrease interesting, as another analyst, Colin Sebastian of Lazard Capital Markets, expects that Microsoft's shipment reduction will have a negligible effect on software sales (though it does make the possibility of a 360 price cut unlikely).

It will be interesting to see how the market reacts when Sony makes its financial report on Tuesday.

[Via Joystiq]

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Reader Comments (Page 1 of 1)

Daryl1

1-26-2007 @ 4:28PM

Daryl said...

So 12 million by June right? I think that is the end of their fiscal year.

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Richard Mitchell2

1-26-2007 @ 4:33PM

Richard Mitchell said...

"So 12 million by June right? I think that is the end of their fiscal year."

That's right. So, about 1.5 million in 5 months.

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Daryl3

1-26-2007 @ 5:04PM

Daryl said...

That isn't too many being sold in 5 months. Maybe people don't buy consoles much this time of year.

I know Nintendo hopes to move 6 million units, so they'll have sold 1/2 as many.

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blamecanada4

1-26-2007 @ 7:28PM

blamecanada said...

The sales don't really pick up until you hit around that $200 price point. Nintendo does very well because it has a nice system that is pretty cheap. The $400 price point is a little high to hit mainstream, I mean it's not too bad for the hardcore gamers, but for those people who just play a game now and then (aka mainstream). 10 million in a year may not seem like too many, but that should be the slowest year of the consoles lifespan.

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T Ghost5

1-26-2007 @ 10:45PM

T Ghost said...

I agree 100% with blamecanada.

US$400 is totally out of the mainstream price scope.

After 1st or 2nd price drop THEN it will fall into the mainstream audience price range.

10 million early adopter Hardcore consumer base is an AMAZING number when you look carefully.

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Murc6

1-27-2007 @ 3:20AM

Murc said...

technically speaking, more then 1.5 million will be sold...but that number is refering to microsoft sales, and not retailer sales...since this last holiday season many retail chains stocked up on them just in case...they sold well, but still, many still have many in their inventory, so it will take a month of so more to sell those off.

The 360 will sell extremely well next holiday season...since by them there will be the newer 120GB 360 with HDMI, and Halo 3 will be out.


I'm dissapointed at the consumers for buying into nintendo's hype, they spent so little on R&D, and are reaping the rewards because of a simple remote. They fact the nintendo sells it for 250 is rediculous. That price is far to high for what they offer.

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Thomas7

1-27-2007 @ 8:36AM

Thomas said...

everywhere I go... I see a pile of 360(s) @ bestbuy.. how much longer is Best buy going to be willing to give all that floor space to MS 360... This is a good time for a price drop.. but I think... MS should drop the price now.. because it's tax return season, and with a price drop you may get some uplift in sales.

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Luis Martinez8

1-28-2007 @ 1:53AM

Luis Martinez said...

at least we all know xbox 360 will outsell ps3's no matter what..

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