Hundreds of video game fans waited in line in chilly weather across the U.S. Tuesday in order to be among the first to get their hands on Microsoft Corp.'s new Xbox 360 video game console.
They may be the lucky ones. Most stores quickly sold out of their limited supply and prices for the console on eBay topped $2,000. Consumers from California, Florida, Massachusetts, Nevada, Texas and Washington complained to MSNBC.com that finding an Xbox 360 for sale was nearly impossible.
(MSNBC is a Microsoft-NBC joint venture.)
The Xbox 360 is the first in a new generation of game consoles aimed at moving gaming beyond its traditional audience and is designed to offer near-photo-realistic graphics, play music and video and link up gaming communities over the Internet. Similar offerings are due from Sony and Nintendo next year.
Microsoft is offering two versions of the Xbox 360. The basic "Xbox 360 Core System" sells for $300, while a $400 version has a removable hard drive and can play older Xbox titles. Most buyers were expected to purchase the $400 model.
A crowd of gamers at a Best Buy in Manhattan clapped and cheered when the first purchases were made just after midnight Tuesday, but shortages dampened the mood even there. 19-year-old Peter Gonzalez, the first in line, said he felt “amazing,” and that his nearly 30-hour wait was worth it. The college student planned to stay up all night playing games before heading to classes in the morning.
But 90 of the 200 people in line at the store were disappointed to learn they had to buy the $300 “Core” system because the more expensive model was sold out. "It's like buying a car without the engine," said Eddie Buist, 29, from the Bronx.
Many stores quickly sold out. Internet retailer Amazon.com Inc. and the Web sites for Circuit City Stores Inc., Best Buy Co. and Wal-Mart Stores Inc. all listed the consoles as being sold out Tuesday.
Best Buy spokesman Jay Musolf said that most of the chain's stores across the country were sold out of the Xbox 360. However, he said, additional shipments were coming.
"We've been telling customers they will have other opportunities throughout the holiday season" to buy the Xbox 360, he said. "Just because you don't see it on the first day," don't give up, he said. Musolf advised customers to "follow up with their local store, and check on the timing of incoming shipments."
“Demand (for the Xbox 360) has been exceptionally high,” Chris Olivera, a spokesman for video game retailer GameStop, which recently bought rival EB Games, told Reuters. GameStop on Tuesday began filling orders that had been made before May 24.
Jim Babb, a spokesman for Circuit City, told Reuters the retailer “would always like to have more” and expects to get resupplied several times between now and Christmas.
Microsoft and retailers had warned consumers of the limited supply ahead of the launch, but denied there were production problems or that the supply had been artificially kept tight as a marketing stunt. Before the launch, Microsoft said that fewer consoles were available initially in North America because of its plan to launch the console worldwide within a few weeks, instead of months.
“It’s going to be tough to find an Xbox 360 this holiday season,” David Hufford, group director of the Xbox platform, acknowledged to MSNBC.com. “We’re doing everything we can to replenish the retail channel. We have thousands of people working around the clock manufacturing Xbox 360s, stocking those onto 747 jet airplanes and flying those planes into the United States as quickly as possible.”
Microsoft, which is virtually tied with Nintendo for second place in the $25 billion global video game market behind Sony, has said it aims to sell 2.75 million to 3 million Xbox 360s in the next 90 days.
Weary of lines
Dozens of consumers who e-mailed MSNBC.com expressed disbelief that so few consoles were available.
“The distribution of Xbox 360 is a joke,” wrote Shawn Smith of Massachusetts. Smith said he went to six stores without finding a console. “Of the stores I heard a count on the quantities available, [there] were five at one store, eight at another, and 12 at another. … If the company could not make much more beyond the preorder of units why keep hyping it?”
Others said they had pre-ordered with GameStop and EB Games, both units of GameStop Corps., only to be told they may not see the console until early 2006.
“There are going to be a lot of disappointed kids on Christmas,” wrote Karin Roach of Canton, Ohio.
“I think the system is great, but I’ve grown weary of the long lines and not enough systems shipped so as to cause a buying frenzy,” wrote George Fuentes of Northridge, Calif. “If you know the launch date is Nov. 22 then manufacture enough for the demand.”
Microsoft’s Hufford said the company was “very concerned and sensitive to the fact that some consumer don’t have an Xbox 360 today that want one,” but defended the decision to launch now, in time for the holiday season.
“Consumers have been hearing about the Xbox 360 for more than six months now, they’re ready, we’re ready, so that’s why we moved forward. … Our job now is to get [the consoles] into the country as fast as we can,” Hufford said. He noted that supply problems were historically common when game consoles were first introduced. “These launches are not easy to undertake.”
Best Buy's Musolf agreed. "We always want more. Anytime there’s a big launch — particularly of a video game console — people are excited and demand’s always going to be high."
To those still waiting, Hufford offered the following advice:
“Contact your local retailers as often as you can and ask very specific questions: ‘When are you anticipating the next shipment and specifically, do you have pre-orders that you will be fulfilling before you fulfill walk-up demands.’” It’s important, Hufford said, for consumers to find out whether they’re competing against other people walking into the store, or with a long line of back orders waiting to be filled as well.”
There's always eBay
Many people did succeed in acquiring an Xbox 360 on Tuesday, and were happy to have done so.
“The console looks great, the [high-definition] graphics are incredible – what a gaming experience,” Joshua Abbot of Wildwood, Mo., wrote to MSNBC.com. “It was worth the wait in freezing conditions all night to be the first to get one.”
Graduate student Christopher Thompson set out early on Tuesday morning for a Costco in Santa Clarita., Calif. He was sixth in line when he showed up at 4 a.m. A winning raffle ticket let him snatch up one of 48 Xbox 360s in the store. “I feel great that I have it, but I feel bad that people who were there before me didn’t get one,” he told Reuters.
Some people fortunate enough to get their hands on an Xbox 360 immediately resold it on eBay, occasionally fetching thousands of dollars for packages that sometimes also included games and other add-ins. About 1,800 Xbox 360s were sold on the site between midnight and noon Pacific time Tuesday, the online auction company told The Associated Press.
EBay said the average price for consoles, including those sold with games and other add-ons, was $660. However, the company said some console packages were selling for as much as $2,500, with bidding and sales prices varying widely. Spokesman Hani Durzy said he wasn't surprised by the frenzy, calling it “par for the course” whenever a hot new electronics item is released in limited numbers.
“What you see on eBay is a classic reflection of supply and demand,” he said.