Microsoft have dropped a huge bomb on developers, posting that they only expect to ship a total of 12 million units by June 2007. The notoriously quiet spring period has meant Microsoft will expect to ship 3 million less consoles than originally expected. Pushing out 10 million consoles before the end of the year to beat their own target has left many stores with large stocks of consoles. Microsoft"s Chris Liddell said "There"s a reasonable amount of inventory in the channel."
A loss of $289million for the quarter was also posted, with Microsoft explaining that repair expenses for the 360 and an increase in the console"s warranty ate into any possible profits. The shipment drop ate into game publishers stock, as four of the big publishers shares dropped after the announcement.
Saint"s Row publisher THQ was the worst hit, with shares falling four per cent, knocking US $1.25 off each share. Take Two saw shares drop 2.3 per cent, knocking off 40 cents. American Technology Research analyst PJ McNealy highlighted concern over revised results from hardware manufacturers, "Videogame publishers will be under pressure today after Microsoft cut its life-to-date shipment," he said on Friday.