Microsoft Reveal Shortage Source

Speaking in an interview with the Ottawa Citizen, Microsoft CEO Steve Ballmer talked about the reasons behind the supply shortages of the Xbox 360.

“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. 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.”

“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. We’re doing our best.” Ballmer added. “We are making more. All stores are getting new units each week. Can we make as many as people want? The answer is no, but not because we don’t want to.”

It appears that Microsoft were not able to yield enough satisfactory chips, ergo the small amount of Xbox 360 units produced. However, instead of missing the vital holiday launch window, the company decided to put as many systems in the hands of gamers as they could before breaking down the shortages with the looming second and thereafter shipments. Still, there could have been more than a small element of strategy in the next-gen console’s launch.