Analyst Says Microsoft May Ship Fewer Xbox Consoles

Microsoft Corp. may ship half as many Xbox video game consoles as originally promised when the machine launches Nov. 8, according to a video game industry analyst.

Microsoft, which has said it will deliver 600,000 to 800,000 Xbox consoles to stores by Nov. 8, refused to comment Thursday. But analyst John G. Taylor of Arcadia Investments in Portland, Ore., said his conclusions were derived from sources at “almost all” major retailers that expect to carry the $299 game machine.

“My retail contacts, based on the conversations they have had with Microsoft, believe that the total output is closer to 300,000” units on the day of launch, Taylor said. Retailers Thursday confirmed that Microsoft has warned them of reduced supplies.

Microsoft’s vice president of games, Ed Fries, this week told online game magazine Gamespot that two factories in Hungary and Mexico have not yet started to manufacture final retail machines. The factories, at full capacity, are expected to make 150,000 consoles a week, Fries told Gamespot. With seven weeks to launch, Microsoft has less than three weeks to bring its plants up to full speed if it is to make its goal of 600,000 units.

If Microsoft scales back its volume, it would represent a “second black eye,” said P.J. McNealy, senior analyst with GartnerGroup Inc. “The first black eye was when they pushed the Japan launch date to next year. It would be a big misstep, because they’re trying to make a good first impression here.”

Sony Corp. last year halved its initial shipment of PlayStation 2 consoles in the United States to 500,000. Sony has since fixed its production problems and is manufacturing 1.5 million PlayStation 2 consoles a month, said Sony spokeswoman Molly Smith.

“There’s a reason why the word ‘hard’ is in hardware,” Smith said. “It’s a very challenging undertaking.”

Peter Main, Nintendo Co.’s senior vice president of marketing, said he received a call this week from retailers, including Best Buy, Wal-Mart and Electronics Boutique, asking if the company would increase shipments of its GameCube console Nov. 18 to “make up for somebody else’s problems.”

Main said Nintendo, which recently pushed back its North American launch by two weeks, was “locked and loaded” to deliver 630,000 GameCubes to the United States and 70,000 to Canada before Thanksgiving weekend.

Meanwhile, retailers continue to take reservations from consumers wanting to guarantee an Xbox on Nov. 8. Amazon.com, on its co-branded site with ToysRUs.com, said it is proceeding with its pre-order sale Sept. 24.

Times staff writer Abigail Goldman contributed to this report.