Xbox components indicate low sales

NEWS

Sales of Microsoft's Xbox video game console are likely to scrape the low end of current company forecasts, based on recent reports involving key component suppliers. Chipmaker Focus Enhancements, which last year signed a contract with Microsoft to become a secondary component supplier for the Xbox, said in a financial update statement released late on Thursday that Microsoft has yet to order any chips. The Xbox is to use Focus' FS454 chip, which decodes video signals so they can be displayed on a TV screen. "Microsoft has informed us that although Xbox met its holiday season sales estimates, the unit sales were on the low end of Microsoft's forecasted range, reducing Microsoft's component procurement requirements in the first half of 2003," Focus chief executive Brett Moyer said in the statement. "As a result, Focus Enhancements has been told by Microsoft not to anticipate purchases of the FS454 chips for Xbox in the first half of 2003." Focus said it would provide further details on the Microsoft contract in its fourth-quarter earnings report in early March. A Microsoft representative said information provided to Focus was consistent with earlier Xbox forecasts. "Halfway through the fiscal year, it is appropriate timing for Microsoft to review supply orders to account for seasonality as well as unit sales forecasts," the representative said. "At our (second quarter) earnings announcement, we reported that we will end the fiscal year within the sales range originally forecast, but in the bottom half of that range, and for that reason we have asked suppliers to make applicable adjustments." Nvidia, which supplies the main graphics processor for the Xbox, is also expected to report lower Xbox-related business when it reports results for the fourth quarter and the fiscal year on 13 February. In a Nvidia report released earlier this week, Merrill Lynch analyst Joe Osha cut his estimates for Nvidia's Xbox business. Osha now expects Xbox-related revenue for Nvidia's fourth quarter, which ended 26 January, to total $40m on 800,000 units, down from previous estimates of $85m on 1.7 million units. "We believe that there are between one million and 1.5 million unsold Xbox processors somewhere in the supply chain," he wrote. For the new fiscal year, Osha expects Nvidia to ship 7.1 million Xbox chips for $328m in revenue, down from his previous forecast of $410m in revenue from 8.8 million units. Microsoft executives said earlier this month that the company is on track to bring total Xbox shipments to about nine million by the end of the company's fiscal year, 30 June. That would bring sales in at the low end of the nine million to 11 million units the company had forecasted at the beginning of the year, after the console made a slower than expected entry into the highly competitive video game market. By contrast, market leader Sony recently announced it has shipped more than 50 million units of its PlayStation2 console to date.

See the Finance News Section for the latest financial news in the high-tech sector. Let the editors know what you think in the Mailroom.

Post your comment

In order to post a comment you need to be registered and logged in.

You can also log in with Facebook. Log in or create your ZDNet UK account below

By signing up for this service, you indicate that you agree to our Terms and Conditions and have read and understood our Privacy Policy. Questions about membership? Find the answers in the Community FAQ

ZDNet UK Live

ike fuelband is great for every healthminded person ! to work out! theres this website called textme4free.com that you can use to text anywhere in...

10 hours ago by bordero on Nike's FuelBand wristband gamifies exercise

> I'm told it's somewhat annoying when people have their Macs stolen > and Apple stores treat the thief as the owner, but there you go. Ouch,...

12 hours ago by BrownieBoy on AMD Ultrathins to challenge Intel Ultrabooks

@kevinmchapman. OK, I acknowledge that 'most' was a gratuitous throwaway comment as an afterthought and too presumptuous. As to proof, as you...

16 hours ago by Moley on A tale of two distros: Ubuntu and Linux Mint

@BrownieBoy > Works really well for thieves.... >> Nice attempt to deflect the argument by tossing in a point that's totally >> irrelevant, even...

17 hours ago by Jack Schofield on AMD Ultrathins to challenge Intel Ultrabooks

fantastic that the so called piracy bills have been withdrawn. however, these anti-democracy supporters are still in the shadows so lets be alert...

18 hours ago by raskolnikof on SOPA, Protect IP support wavers in face of online protest

Please God no; teach them anything you like - thinking rationally, the uses and misuses of data, what data is and what it's not - but leave the...

20 hours ago by Tony Douglas via Facebook on Kids are the future. Teach ’em to code.

@Jack, > Works really well for thieves.... Nice attempt to deflect the argument by tossing in a point that's totally irrelevant, even it were...

1 day ago by BrownieBoy on AMD Ultrathins to challenge Intel Ultrabooks

Make that 13 people now - I got refused today at Manchester airport. I thought I was up to date on this legislation - I knew of the EU ruling from...

2 days ago by bootlegger on UK airport body scans will not be opt out

Don't forget to check out apps like GoodReader or SlideShark either, they're indispensible for people on the go in presentation situations. Best...

2 days ago by tinycg on Four top iPad apps for people on the move

Well it seems there is something a number of us agree on. Why is the Ubuntu Unity launcher so ugly? I thought perhaps it was something to do with...

2 days ago by TerryRK on A tale of two distros: Ubuntu and Linux Mint

Duplicate comments are not made intentionally. Its very good to know that now you are keeping check on this problem because sometimes a commenter...

2 days ago by Freebies202 on Microsoft fixes blog comments, speeds up blogs with open source

"the very significant number of users" and "many (most) of us" - you have no evidence for these statements. It is a fact that most users are saying...

3 days ago by kevinmchapman on A tale of two distros: Ubuntu and Linux Mint