Rumors of Microsoft cheating their Sales

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Jongamer
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Rumors of Microsoft cheating their Sales

Post by Jongamer » Mon Apr 16, 2007 4:23 pm

Article from www.nexgenwars.com

"It's crystal clear that Microsoft's Xbox 360 and Nintendo's Wii leave Sony's PS3 in a trail of smoke and dust more and more with every day that passes. But who's winning when there are only two consoles to be mentioned: the Wii, or the 360? I found this article today on Gamespot saying that Microsoft might have just mugged their own sales figures. How? By stuffing the retail channel.

Here's how it goes. A company like Microsoft has a fiscal year to end. As the end of that fiscal year approaches, the company realizes that only 9 million units of their product have been shipped (sold units are something to bother their heads with later) out of the 10 million target. The company then “stuffs retailersâ€

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Post by bicostp » Mon Apr 16, 2007 4:33 pm

I think this belongs in Forum 42.

http://benheck.com/phpBB/viewtopic.php?t=11768

I also think nextgenwars.com is pretty biased.

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Post by Jongamer » Mon Apr 16, 2007 5:05 pm

well I posted here, so people don't get tired of my News flash threads.

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Post by EnterTheHatrix » Tue Apr 17, 2007 12:30 am

NexGenWars are crap. Most of their news and statistics are crap, because people are stupid enough to believe in their news and statistics.

They're the only site who posts it, and prey on newbies who don't know any better. Their statistics on how many consoles are sold are totally wrong.

Like they have the ability to increase the sales number every time a system is sold? That involves integration in to every store woldwide who is selling a Wii... It's BS.

Don't believe anything NGW have to say.

When the statistics are released, they are released by the official PR's of their respective companies, not dumb sites like NGW.. All they can do is guess.
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Post by SteelFox15 » Tue Apr 17, 2007 2:49 pm

Where do the numbers come from?

The console sales numbers you see on the front page of NexGen Wars are estimates, and are not intended to represent exact, down to the minute sales as only Microsoft, Nintendo, and Sony know the exact sales figures of their respective consoles. What we do here at NexGen Wars is compile numbers from NPD, Media Create, ChartTrack, as well as various other sources. We then take these numbers and, based on past sales trends, extrapolate the numbers out to give as close to real-time estimates as possible. Again, these are only estimates, but we are confident in our ability to bring you accurate and unbiased sales figures. Not only do we extrapolate the numbers out so they don't lag months behind with the official sales numbers, but we also update the numbers when new official numbers have been released to keep our estimates as accurate as possible.
http://nexgenwars.com/how.php

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Post by jones » Tue Apr 17, 2007 2:55 pm

Source=gamespot.com

Here's the whole post from Gamespot regarding this. Basically all companies do this at one time or another. Not that big of a deal.
Microsoft cooking 360 figures? Source: The blog of Roger Ehrenberg, president and COO of investment analyst service Monitor110, as picked up by Kotaku, Wired, and others.

What we heard: The Ehrenberg blog post roundly condemns Microsoft for "channel stuffing," a shady process by which companies can meet their stated shipment goals by sending unwanted inventory into the retail channel just before the end of a fiscal period. The company gets to say it met its targets, but the stuffing can come back to bite it later. Eventually those goods could be returned to the manufacturer or retailers might reduce future orders until they've worked their way through their existing backlog of merchandise.

Ehrenberg bases his accusation of channel stuffing primarily on postings from another financial blog, the Apple-focused Blackfriars' Marketing. The first post was made last December, and questions Microsoft's ability to hit its publicly stated target of selling 10 million Xbox 360s by the end of 2006.

The Blackfriars writer notes that Microsoft counts systems sent to retail as not just shipped but actually sold. It then crunches some numbers (and apparently confuses worldwide figures with the NPD Group's US-only numbers at one point) and concludes that Microsoft could have hit its goal for the year, but only by stuffing the retail channel. He follows that up by implying that Microsoft threatened to withhold copies of its Vista operating system--released in January--from retailers who didn't play along and choke down excess Xbox 360 inventory.

The second Blackfriars post is from late January, right after Microsoft downgraded its sales projections for the Xbox 360 from 13-15 million systems by the end of June to 12 million. The Blackfriars writer views the downgraded guidance as confirmation that the publisher was indeed channel stuffing at the end of 2006.

"Strong companies confident in their strategy and performance don't do these things," Ehrenberg wrote. "They don't have to. What kind of a message does this type of behavior send to the investor community and, more importantly, your customers? Weakness. Fear. Short-term thinking. Nothing that represents a positive signal for a better, brighter tomorrow."

While Ehrenberg paints a pretty bleak picture, a handful of analysts GameSpot contacted about the story disagreed.

"Microsoft sold-in 10.4 million 360's by December 31," noted Pacific Crest Securities' Evan Wilson. "It seems very unlikely that Microsoft stuffed the channel to beat their 10 million forecast."

Wedbush Morgan Securities' Michael Pachter was similarly skeptical. "It's possible that Microsoft has shipped a few hundred thousand consoles more than retailers want, but not possible that it shipped millions," Pachter told GameSpot, adding, "Microsoft would never stuff the channel to make numbers look better. I really don't buy this at all."

Lazard Capital Markets' Colin Sebastian called it "old news," but not what he would characterize as channel stuffing. "Microsoft's guidance for Xbox shipments during the first half of 2007 disappointed some investors, but the reality is they already had enough units in the channel to fulfill much of the demand," he said.

Nollenberger Capital Partners' Todd Greenwald said Ehrenberg's issue with Microsoft was legitimate, but also old news.

"Sure Microsoft probably over-shipped the channel," Greenwald said," but we knew that three months ago... To me, and most of Wall Street, it was pretty clear what Microsoft had done. And Sony's done the same thing. Nintendo's the only one who isn't doing it, but that's not to say they won't do it again in the future."

Greenwald also pointed out that it's different for a hardware vendor to stuff the channel than a software publisher because systems have a much longer shelf-life and will eventually sell. On the other hand, Greenwald said if software doesn't move in the first month, excess inventory will quickly suffer price cuts and returns.

When contacted by GameSpot, Ehrenberg himself confirmed that his blog was intended to take what was considered old news in the gaming world to a wider investment audience that might not have heard it before.

The official story: Microsoft did not "stuff the channel" with Xbox 360s to meet our sales numbers. Retailers had built a healthy inventory position last quarter to support sales during the holiday, and also for this quarter to accommodate holiday gift card redemptions.

Bogus or not bogus?: Bogus that this is a big deal. Companies play semantics with "units shipped" and "units sold" all the time, we essentially knew about this months ago, and one man's channel stuffing is another man's slower-than-expected holiday sales season.

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Post by CronoTriggerfan » Tue Apr 17, 2007 6:16 pm

EnterTheHatrix wrote:NexGenWars are crap. Most of their news and statistics are crap, because people are stupid enough to believe in their news and statistics.

They're the only site who posts it, and prey on newbies who don't know any better. Their statistics on how many consoles are sold are totally wrong.

Like they have the ability to increase the sales number every time a system is sold? That involves integration in to every store woldwide who is selling a Wii... It's BS.
Well then, seeing as you OBVIOUSLY know so much about the cold-hard numbers, where's your site covering the sales of the systems around the clock? :roll:

Look, I'm not doubting that NexGenWars' facts are not solid. In fact, they're probably far from that; however, as a rough estimate, you can't discredit their numbers as a credible source.

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Post by benheck » Tue Apr 17, 2007 11:56 pm

I've also heard that Nintendo arranged their booth at E3 2006 in order to MAKE lines forms for the Wii. As in, creating a bottleneck so people had to line up, like a traffic jam. Thus "look at the lines for this thing!" for the cameras.

Point being, no company is above BS tactics.

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Post by EnterTheHatrix » Wed Apr 18, 2007 3:04 am

CronoTriggerfan wrote:
EnterTheHatrix wrote:NexGenWars are crap. Most of their news and statistics are crap, because people are stupid enough to believe in their news and statistics.

They're the only site who posts it, and prey on newbies who don't know any better. Their statistics on how many consoles are sold are totally wrong.

Like they have the ability to increase the sales number every time a system is sold? That involves integration in to every store woldwide who is selling a Wii... It's BS.
Well then, seeing as you OBVIOUSLY know so much about the cold-hard numbers, where's your site covering the sales of the systems around the clock? :roll:

Look, I'm not doubting that NexGenWars' facts are not solid. In fact, they're probably far from that; however, as a rough estimate, you can't discredit their numbers as a credible source.

CTFan
When sales figures are released, we show them.. We don't make up BS sales figures.

Last time I checked, their sales figures were over 400,000 off for the Wii, and they updated it. If they're that far from real sales, it's not a good prediction is it?
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Post by HotDog-Cart » Wed Apr 18, 2007 5:44 am

Ben you heard wrong :D

The wii was just so sexy, everyone stopped and looked. ITS THE TRUTH! :D
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