Ballmer blames 360 shortages on chip supply

"We're doing our best," Microsoft chief executive tells Ottawa Citizen, says that new shipments are going out each week.

It's no secret that the supply of Xbox 360s in North America has been outstripped by the demand for the new unit so far, and Microsoft is under pressure to explain why.

In a Q&A session with The Ottawa Citizen published yesterday, Microsoft chief executive Steve Ballmer responded to the notion that the company is fabricating the shortages to increase perceived demand for the system.

"In these new consumer electronics devices based on new chips, there's always the question of what yield will you get out of the manufacturing process of the new chip," Ballmer told the paper. "We're getting a little less, but not much less than the yields we expected, and we know that the yields we expected will probably outrun supply. But we decided to go ahead and launch rather than wait until post-Christmas and get a few million units out into the hands of users."

Ballmer also reiterated the oft-repeated company line, noting "all stores are getting new units each week" as the company attempts to meet demand. "We're doing our best," Ballmer said.

194 Comments

  • airsoftplayer67

    Posted Dec 29, 2005 12:12 pm PT

    i got a 360 at Costco, maybe you all should try a store like that.

  • LinkedDS

    Posted Dec 20, 2005 5:05 pm PT

    BS ALERT! BS ALERT!

  • teksol

    Posted Dec 14, 2005 8:12 pm PT

    Reading all the whining sure is boring, I'm going to go play my xbox 360 that I recieved from my local EB games on Monday December 12. Call of Duty is a blast and Halo 2 runs sweet on it. Hope to see you all on Live whenever you get your xb360. :-)

  • epmoore

    Posted Dec 14, 2005 4:09 pm PT

    i pre-ordered in june and was 21st. After launch I was third. And they are shipping every week? Hmm maybe my phone is broken....

  • jaefrmbk2k

    Posted Dec 13, 2005 11:17 am PT

    People of Microsoft: If you do not make more xbox 360's available for purchase IMMEDIATELY........kittens will die! KITTENS WITH HUGE EYES!!!

  • MikeBF2C

    Posted Dec 13, 2005 1:07 am PT

    I agree, they'd better hurry up and get some more X-Boxes out. I'm not paying $1,000 for some stupid xbox because someone bot it a week before I did.

  • UltimatumCHIEF

    Posted Dec 10, 2005 4:31 am PT

    I'M TURNING MY BACK ON YOU Microsoft, NO MORE Xbox360 IN MY HEAD AND I WILL SLEEP BATER AT NIGHT. GOOD BYE 360, HELLO PS3.

  • Harkness2001

    Posted Dec 10, 2005 12:14 am PT

    Jeez MS! If they keep up this bullcrap..."new shipments"...I many become a Sony and Nintendo only gamer. It's almost enough to make me turn my back completely on MS.

  • nicholas_drex

    Posted Dec 9, 2005 7:59 pm PT

    I'm a sales manager at Best Buy and the only 360's we've recieved were the launch units. We are expected to get 50 on 12/16 but then again we were supposed to get that many on 11/22 and only got 30. Since employee's couldn't buy the first wave, I pre-ordered at EB and still don't have one. Maybe I'll get a PSP instead.

  • Castle256

    Posted Dec 9, 2005 3:30 pm PT

    First of all if you guys think, XBOX 360's are going to die soon you guys are really smoking something. Second you are guys are telling to cancel pre-order of Xbox 360 and to place a preorder a PS3. Well have you gone to the store tried to place an pre-order yet? They are not taking any not until E3 of 2006 is over. That is when they are supposedly to receive SKU information. If you guys are desperate for one get one from ebay. According to inquirer.net, Ebay has been selling it the most. Second why complaining, if you guys can think of doing a better job of developing a console and distributing them please go ahead and do it. Let's see how you do it.

  • griffdog466

    Posted Dec 9, 2005 2:02 pm PT

    Lets have a moment of silence for the xbox 360's premature end.

  • griffdog466

    Posted Dec 9, 2005 1:50 pm PT

    This is the biggest ppiece of BS I have ever heard. The gamestop I go to did not get a single system since launch. Now microsoft is blaming their chips on the problem. I preordered in july and gamestop was forced to lie to me because microsoft cannot make enough systems.

  • jasonpwilson1

    Posted Dec 9, 2005 1:13 pm PT

    The EB and Gamestop near me have gotten shipments every week of Xbox 360's. That is how I got one extra for my brothers Christmas gift.

  • E_C_Holcombe

    Posted Dec 9, 2005 12:56 pm PT

    Thats funny.my gamestop in Asheville NC keeps giving me the run around they keep telling me the next week. EVERY WEEK. So maybe ill have my new xbox by 2010.

  • Bandit_Jing

    Posted Dec 9, 2005 12:44 pm PT

    EACH WEEK!!!!!!!!

    RIGHT!!!!! and bush is always right

  • mezonesxbox

    Posted Dec 9, 2005 12:42 pm PT

    ITS A LIE!!! I called TWO major stores in Washington where Microsoft corporate is based and none of the stores have seen a 360 since lanch!! I called two top retailers including Gamestop and Wallmart. None have any systems even though Microsoft says to be shipping weekly, but these stores are practically neighboors to MSFT and have no systems yet!!!!

  • NinjaSpunk

    Posted Dec 9, 2005 11:08 am PT

    they're getting like 1-2 units in each week, apparently. so technically, not a lie.

  • latinoboy814

    Posted Dec 9, 2005 10:33 am PT

    MY local Gamecrazy has been getting a few Xbox 360's ever week, and in a week or 2 ill be getting mine. So hes not lying that everystore getting some every week.

  • cypher50

    Posted Dec 9, 2005 10:30 am PT

    Every article like this makes me even more glad that I am just waiting for the PS3...

  • chrisdojo

    Posted Dec 9, 2005 10:18 am PT

    buh....but teh chips n dips!!!!111

  • yanks43215

    Posted Dec 9, 2005 10:11 am PT

    They should just stop making up lame excuses and just ship them out.

  • captaintallman

    Posted Dec 9, 2005 9:29 am PT

    Here this, i was 26th on the list of 25 systems and gamestop told me that i would get the next system if someone didnt pick it up and they would call me to let me know. So a week goes by and i go back to gamestop checkin when the next shipment is comin in and the dude told me that they sold some units on the FLOOR!! cause some people didnt pick theirs up. I told him that i was next in line and they never called, so he checked out the list and said these words "whoa.....sorry man but we totally forgot to call u and give u ur system, all u can do now is wait till next shipment". i ordered and paid for my system in march too. pisses me off.

  • jaefrmbk2k

    Posted Dec 9, 2005 8:43 am PT

    the PS3's already been pushd back to the summer and irregardless of launch date, there's sure to be supply prollemz. to me, the later the launch the better-the better for Sony to work out all the hardware kinks, the online services, launch titles, the dev kits and middleware etc, naow... the games tho are what'll really drive my purchase and to date 360 ain't showin' me much. but when Halo 3 comes or sum other dope title and long as iss fire, imma cop that. same for PS3. (it'll prolly be MGS 4 that'll get me 2 crack the wallet) but i WILL cop the HiDef Sony Wega 34" alot sooner az CRT's are unfortunately becoming ancient relics but i have the space, the performance is premium and the price iz right so thass me right there.

  • RIC

    Posted Dec 9, 2005 8:40 am PT


    No shippments at any of the stores I've visited. I am 58 out of 110 in my babbage store. They received 15 at launch and nothing else since. They say they will receive more after Dec 18 // wouln't say how many. If they receive 15 per month... that spells Feb or March for me.

    No biggie... waiting on Oblivion anyway

  • SavoyPrime

    Posted Dec 9, 2005 8:17 am PT

    Okay, MS's tagline of "all stores are getting new units each week" is pure BS. None of my local stores have had X360's since launch day, and even my local EB (where I have my system preordered) hasn't received any shipments since launch day.

  • Dahok

    Posted Dec 9, 2005 7:51 am PT

    in business there is always a reason for problems. i myself have no love for xbox 360, but i can also say even being a sony fanboy they have exscuses too. the reason for exscuses is they can either satisfy concerns, or try and shift focus to other concerns. Yes the shortages suck, yes for all u M$ guys its a pain in the ass and i think you deserve what you preordered. However i dont think anyone needs to suffer through the explanations of people who are in place to not M$ look bad. Oh well i hope u M$ fans get your 360, and i hope i get my PS3.

  • jaefrmbk2k

    Posted Dec 9, 2005 7:31 am PT

    yeah, MS's grand scheme is to undersupply the 360 so they can lose money but get the bonus of boosting demand? get a grip kidz. maybe they rushed it aout, so maybe there iz a supply problem somewherez but there's no benefit to not being able to sell their product while it's most in demand. they're losin' money right naow and ain't nothin' good about that. most ppl'll just wait, OR if they're really emotional like some of you posterz, they'll have a huge tiddy attack and go to the other side(PS3) thinking that it must be sum personal vendetta against them cuz they can't get their Pacifier360 quick enuff.

  • thehodgeman

    Posted Dec 9, 2005 7:28 am PT

    pfffft! that is the biggest load of bull i have ever heard, more like shops are not getting 360's for months over here in the UK, i have rung round countless shops and the answer is, we are not getting our next shipment of 360's until atleast february, pull yourself together microsoft it is getting beyond a joke and is taking the p!ss now

  • Ultraviolence

    Posted Dec 9, 2005 7:18 am PT

    Seriously, the retailers should be shot for taking so many pre-orders. It's their assurance for a cash-grab. Historically, launch day console releases always result in a huge supply vs. demand problem. And the marketing engine that Microsoft can afford is huge enough to generate so much anticipation of the XBOX360 from it's captive audience.

    I mean really, being an avid gamer since the 80s, the 360s launch titles BLOW. PGR3 is about the only thing worth mentioning, while most other tentative titles were "no-shows". Oblivion ring a bell? I'm sorry, but Microsoft's PR department is laughing, cuz here we all are crying about the shortage... but really... what compelling games are even available for this frikkin unit.

    Wait till March? Likely. And I'm sure by next December I will be the proud owner of both the 360 as well as the PS/3.

    Don't get me wrong though, I still say, "F" Microsoft. Even their prototype 360 was an Apple G5. What does that say about Microsoft's great operating systems...

  • TAURUSMIKE1176

    Posted Dec 9, 2005 7:05 am PT

    I don't get why more people didn't just pre order the unit back in August. People waited to pre order and now are with out 360's. I'm sitting home with mine not worried about what store will get 360's when. There was no camping out in the cold over night. All I had to do was walk in and pick up my pre paid 360.

  • SLAYERPSP

    Posted Dec 9, 2005 6:46 am PT

    MajinD1979 DO YOU REMEMBER THE PS2 I VE had 2 break and if you can prove you had a og ps2 from launch you get 25 bucks and a free game because of a lawsuit against sony that they settled.what about all the broken ps1 the power was in the wrong place on the first run all of those dont work any more i bought 3 psp all with at least 2 dead pixels so just think about sony has the worst launches as far as stuff not working and if you do reacall the ps2 was no were to find when it came out so all you haters wait for your ps3 you will be waiting at least a year well im playing 720p games now. dont get me wrong ill get a ps3 just like i got a 360 im smart enough to res the day that you can i res my 360 in may and i have one so get a clue people its always like this at the beginning. and if your a true lover of games you will have all the new stuff ps3 psp xbox 360 a good pc nobody needs nintendo no hd no buy plus they dont want hardcore gamers they want non gamers god i hate nintendo they just dont get it

  • Autolycus

    Posted Dec 9, 2005 6:26 am PT

    Been working @ gamestop for 3 years and we havent seen a second shipment at all. MS is losing customer base fast. But at least Sony PS3 wont have to worry about this cause NOONE CAN AFFORD IT!

  • XBOX360LIVE

    Posted Dec 9, 2005 6:25 am PT

    GLad I got mine!

  • wingchunstudent

    Posted Dec 9, 2005 5:38 am PT

    i still haven't received my 360 i am (this) close to jumping ship and getting a ps3 when it comes out, and buying a ps2 for now.

  • your_mom91

    Posted Dec 9, 2005 5:14 am PT

    Man!! Can they make any more lame excuses this one takes the cake.

  • husky31

    Posted Dec 9, 2005 5:07 am PT

    Not accurate of course. I pre-ordered mine on May 15; still waiting. The store I went to received 22 on launch day, 2 this week, will get none next week and probably 10 the week after. If that happens, I'll have mine, a full month after the launch, over 7 months after pre-ordering, and 2 months after being paid off.

  • zentrad

    Posted Dec 9, 2005 5:03 am PT

    A word from the wise...JUST Cancel the pre-order or Change the pre order to PS3 if it cost you nothing, there is no point to wait for something that won't coming until next year

    Hope PS 3 doesn't have the same problems on launch day...

  • Xerosyphon

    Posted Dec 9, 2005 4:45 am PT

    Best Buy is stock pileling 360s, who knows how many other places are doing the same. I'm not saying the shortage is real or fake. I'm pointing out that it's even worse case some stores arn't putting the units on shelves untill they get alot more in, which isn't really fair. All they'll manage to do is create a smaller shortage and make things worse.

    With the shortage that Microsoft may or may not be creating, with stores building up a good stock, plus demand for the system puts a big strain on the whole situation.

  • UltimatumCHIEF

    Posted Dec 9, 2005 4:28 am PT

    Lies lies Microsoft lies all the time, my secret source told me that it was a
    plan to make loads and loads Xbox360's
    before launch date and then hold some number of xbox360's and try to stretch them till PS3 launch so to make you stay with xbox360 till that day because Microsoft tell's you so.
    Very EVIL Microsoft controls everyone and everything.

  • LEXUSFNI

    Posted Dec 9, 2005 4:02 am PT

    BullS#!T........................I really think that Microsoft is fabricating a shortage to increase demand. Because I live in the DC metro area and not one of my friends can get a 360. Because of this BullS#!T I think i will be waiting for a PS3 instead Microsoft sucks A$$..........all the way to the bank.................

  • choasgod

    Posted Dec 9, 2005 3:30 am PT

    lol what BS one of the worlds largest companies can't ship more than 600,000 console.....

  • jrett

    Posted Dec 9, 2005 1:57 am PT

    Here's something I read in an email today:

    Our goal is to make as many Xbox 360 consoles as humanly possible, and our manufacturing facilities working 24 hours a day. Moreover, we have airplanes chartered and flying into our distribution centers on a weekly basis so retail outlets can get new shipments in on a regular basis.


    Unfortunately however, because Xbox 360 is such a hot “must-have” product, demand will outstrip supply. As you are seeing, it will be challenging to get your hands on a console this holiday, yet it certainly isn’t impossible. Our recommendation to you would be to talk with the store manager at your local retailer and ask him/her when their next Xbox 360 shipments will be coming in so you can plan appropriately.


    By early next year, the supply will catch up with the demand. Thanks for your interest and patience.

  • Gohanmohan

    Posted Dec 9, 2005 1:30 am PT

    Man I've been waiting for bloody ages for my Xbox 360 and there is no way the 360's are being manufactured everyday and getting sen to stores every week. The place where I pre-ordered it from only had 8 friggin 360's and I was 21 on the list.

  • madltu2005

    Posted Dec 9, 2005 12:12 am PT

    Been calling all day in the Michigan Area and nothing..?

  • mariokart64fan

    Posted Dec 8, 2005 11:30 pm PT

    im better off waiting for nintendo revolution

  • mariokart64fan

    Posted Dec 8, 2005 11:27 pm PT

    ya right just another one of microsofts tricks

  • slambast

    Posted Dec 8, 2005 10:50 pm PT

    I work in a group that does chip design. I actually believe the chip shortage as being the issue. My money says IBM is the one that isn't pulling their weight. MS is relying on them to create a steady stream of chips in the fabs. If IBM can't get their yield high enough, it results in poor number of processors and graphics chips being released. Its not uncommon for yields to be very low early on in a new chip (like 20-50%). They usually improve as time goes on. Intel is rumored to get > 70% yields on their processors. I wonder what IBM's yields are like for the xbox360 chips?

    The funny thing is, Sony's PS2 supply issues (late 2000, early 2001) were caused by yield issues with its graphics chip (but this was their fault since they didn't partnet with IBM at that point.) The thing that's gonna suck is IBM is creating the chips probably the revolution, ps3 and xbox360.... I wonder if IBM can support that kind of load with all three systems.

    btw, yield is:
    yield = (number of working parts) / (total number of chips made) * 100.

    So if 100 chips are made and only 20 actually work, they are getting 20% yield, that alot of wasted material.

  • jeneagle256

    Posted Dec 8, 2005 10:19 pm PT

    Sounds like Microsoft messed up with the production process. They look real dumb now. Who releases a hot new game system before Christmas and then does not fill orders before the Holiday shopping rush ends! I'm wondering how many people will forget about the 360 and go Sony PS3 instead. If it was not for the greatness of "xbox live" they would be sunk already. I'm actually thinking about buying a Sony PS3 instead now, especially with the next generation DVD player built in. Sony has a golden opportunity here - they must be laughing their heads off!

  • newageblues11

    Posted Dec 8, 2005 9:43 pm PT

    I as well have been waiting for the so called second shipment of 360's but all i get for an answer is "hopefully it will come, in the next 2 days" ya right I've been hearing that one every two days since Nov 22, I'm starting to lose my faith

  • General__bob

    Posted Dec 8, 2005 9:38 pm PT

    Hear that... Thats the sound of nobody caring

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