Friday, January 14, 2011

Microsoft (Nasdaq:MSFT) May Struggle to Meet XBOX 360 Demand in Early 2011

Saying sales of the Xbox 360 during the Christmas season pressured inventory levels, Microsoft (Nasdaq:MSFT) announced there may be a shortage of the gaming system in the early part of 2011.

In December the software giant sold 1.9 million Xbox units, driven for the most part by the wildly popular Kinect device, which allows users to use the control system without using their hands.

To meet the unexpected surge in demand for December, Microsoft said they borrowed inventory they had set aside for January and February in order to meet it.

The popularity of Kinect caught Microsoft offguard, as when it was released in November, it sold 2.5 million units in the first 30 days. There is a bundle Microsoft is offering including the 250GB Xbox 360 and Kinect for $399. The 4 gigabyte version is being offered for $299.

Microsoft CEO Steve Ballmer has aluded to the probability Microsoft may expand the technology used for Kinect to other screens, such as TVs and PCs.

Microsoft was trading at $28.35, gaining $0.18, or 0.59 percent.

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