Rumor: Is the Xbox 360 shortage deliberate?

November 5th, 2005, 10:21 Posted By: wraggster

The official story: "Microsoft does not comment on rumors and speculation."--Microsoft auto-response.

What we heard: With the Xbox 360 still set for a November 22 launch, many gamers are realizing that they will be getting their first taste of sweet, sweet next-gen goodness in less than three weeks. However, a lot of people haven't been able to lock down a preorder of the console, which has become near impossible to get online unless you want to fork out $2000 for GameStop's Omega Bundle.

Most gamers chalked up the 360 supply issues to general platform-launch woes. However, Arstechnica offered a much more conspiratorial theory. They propose that Microsoft is engineering the supply chain so the Xbox 360 will sell out at most locales. Why? Two reasons. First, widespread sellouts would create the appearance that the console is so popular that retailers can't keep it in stock--actually it wouldn't be an appearance, since it would technically be true. Then the media would pick up on the shortages, generating even more buzz about the console and giving it more free publicity.

Such a wily approach would fit right into Microsoft's publicity campaign. The company has jumped onto the viral marketing bandwagon with both feet, using the infamous ilovebees.com alternate reality game (ARG) to promote Halo 2 and ourcolony.net to give the world its first glimpses of the Xbox 360. After ARGs to hype to Xbox 360 contests, the company has now launched another one to promote the Xbox 360 launch.

Though not an ARG, an artificial 360 shortage would also set the stage for a new technique called targeted marketing. Practiced by companies such as San Francisco-based Ammo Marketing, this rather insidious selling style targets "influencers," people whose behavior others want to emulate. Companies hire influencers to use their products in the hopes their friends will see them using said product and then emulate said friend's behavior.

In the case of an Xbox 360 shortage, only the hardest-core Xbox fans will go to the lengths it would take to obtain the console, like waiting in line overnight. Eager to show off the coveted item they were luckily enough to get, these ubergeeks will become mini 360 evangelists, inviting all their friends over to play. Then those friends go out looking for the hard-to-find consoles, locate one, show it off to all their friends, who then all want to get one, und so weiter.

But is there any evidence that Microsoft is manipulating supply to artificially create demand? Sort of. Arstechnica refers to several well-respected Web sites that have received e-mails from readers claiming to be retail employees. Kotaku posted a report from an anonymous Target clerk saying each location is only getting 10 to 50 units of the console. Each Target location has also been instructed to preprint a giant "Sold Out" sign in advance to slap on the front window the minute the last next-gen machine is gone.

But while preemptive signage could be chalked up to mere retail prudence, an e-mail sent to Gizmodo indicates a far more sinister plan could be at work. It comes from an alleged worker at a Norwegian store, which says that every retail location in the country is only allowed 20 360s, regardless of size. (Scandinavian socialism in action!--ed.)To get them, "According to the reader, 'each shop or chain has to sign an agreement saying that they will sell out of all 20 consoles on the release date.'" In addition, the Gizmodo source claims "Microsoft Norway even said themselves that they're gonna use the 'Sold Out' as a marketing strategy to hype the console."

But will 360 sellouts actually generate positive hype? Well, one thing's for certain--when a platform launches with much fanfare and doesn't sell out, people notice. Just ask Sony. Despite solid sales, the PSP was branded a failure by many just because there were still plenty on store shelves during its first weeks on the market.

Bogus or not bogus?: There will be an Xbox 360 shortage, no question. Whether it's deliberate or not can't be definitively proven.

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