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Xbox sales starting to flag in the US?

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Reports of disappointing sales levels for Microsoft's Xbox in Europe and Japan have been compounded by an apparent easing off of demand in the US. Analysts yesterday said that production of the machines at Flextronics had slowed, and that Microsoft could well fail to meet its target of shipping 4.5-6 million units worldwide by the end of June.

If they're right, then Xbox is probably confirming to the classic Microsoft consumer sales profile. The company is generally extremely good at hyping a product at the start, and getting retailers fired-up and stuffed with stock, but tends not to be able to sustain the momentum achieved over the first couple of weeks. When it comes to Windows, of course, this is easily masked by 'sales' obtained via the OEM franchise, which is most of them.

Poor performance in Europe seems to be largely down to pricing, which is turning out to be higher than consumers want to pay, while in Japan Microsoft is on the back foot because some Xbox units seem to have been damaging discs. Sony, meanwhile, will have been much cheered by a Goldman Sachs claim last week that US retailers were clearly preferring Playstation 2 to Xbox. ®

Related stories:
Xbox: 'Microsoft has its teeth kicked in'
Early Xbox sales low in Europe - report

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