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MS to go all out with US Xbox rollout – Europe waits till 2002

Not shipping to meet customer needs. It's the way they tell them...

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The Xbox won't make it to Europe until Q1 2002, Microsoft has announced, and although it will be rolled out in the US and Japan in fall 2001, it seems highly likely that the company will put the bulk of its manufacturing and marketing efforts into achieving a spectacular US rollout for the 2001 holiday season.

Games Division senior VP Robbie Bach, who's now also being styled CXO (chief Xbox Officer), explained not shipping, in purest Microsoft-speak, as meeting customer needs. "Meeting Xbox customer needs is job No. 1. After analyzing the supply and logistics challenges faced by the gaming industry this holiday season, we decided to clarify our new manufacturing plans so that we successfully meet product demand."

Loosely translated, that means that Microsoft expects (needs, actually) to trigger a PS2-style demand wave, and that its manufacturing planning so far can't support high volume rollouts in Europe and the US. The company has probably been wise, however, because it doesn't have serious experience of mass manufacturing at this level, and it also has to take account of the speed at which its suppliers can ramp up component production.

The Xbox will initially be produced at in Mexico and Hungary, by Flextronics International. Presumably the Hungarian plant will supply Europe, and is coming on-stream later. Despite Microsoft's statement that it will supply Japan in 2001, it has future plans to "open a manufacturing facility in Asia to support markets in that region, including Japan."

So really we think the first wave of product in Japan will be largely flag-waving, and that leaves the US as the big one for 2001. ®

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