Sam Vodovoz
SCM 463: Xbox Case
October 25, 2015
1. What supply chain changes did Microsoft make between the Xbox and the Xbox 360? What was the motivation for these changes?
Late in the year 2001, Microsoft had just brought the Xbox console into the world of gaming. In 2004 alone, they had sold about 19.9 million units, which was just a little more than the Game Cube (made by Nintendo). However, at this time Sony had control of the market, selling approximately 190 million consoles between both the Play Station and the Play Station 2. Much of this can be attributed to the fact that Sony had released the PS2 approximately 12 months prior to the Xbox and had many of the most popular games available to consumers. At the time the Xbox was released, Microsoft planned to keep its factories close to the customers because they were concerned with the shipping aspect. Microsoft joined forces with Flextronics to begin production in Mexico and Hungary in 2001. Mexico would be the source of supplies in the USA and Hungary would do …show more content…
Sony had the advantage even though the Xbox actually had better technology. In order to secure a significant portion of the market, Microsoft had planned to release its next console before Sony by improving their supply chain. It is of very high importance to make connections with the whole world at once. By doing so, the Xbox 360 would have to be supplied throughout the world without time separating the expansion like many other launches. Some of the potential benefits were economies of scale in the production by the suppliers and even more importantly entering the market before the release of Sony’s next generation console. Early productions showed that the Play Station 3 would have better technology including built in Blu-ray, however this time it wouldn’t matter since Microsoft had already gained leverage in the gaming market by releasing
SCM 463: Xbox Case
October 25, 2015
1. What supply chain changes did Microsoft make between the Xbox and the Xbox 360? What was the motivation for these changes?
Late in the year 2001, Microsoft had just brought the Xbox console into the world of gaming. In 2004 alone, they had sold about 19.9 million units, which was just a little more than the Game Cube (made by Nintendo). However, at this time Sony had control of the market, selling approximately 190 million consoles between both the Play Station and the Play Station 2. Much of this can be attributed to the fact that Sony had released the PS2 approximately 12 months prior to the Xbox and had many of the most popular games available to consumers. At the time the Xbox was released, Microsoft planned to keep its factories close to the customers because they were concerned with the shipping aspect. Microsoft joined forces with Flextronics to begin production in Mexico and Hungary in 2001. Mexico would be the source of supplies in the USA and Hungary would do …show more content…
Sony had the advantage even though the Xbox actually had better technology. In order to secure a significant portion of the market, Microsoft had planned to release its next console before Sony by improving their supply chain. It is of very high importance to make connections with the whole world at once. By doing so, the Xbox 360 would have to be supplied throughout the world without time separating the expansion like many other launches. Some of the potential benefits were economies of scale in the production by the suppliers and even more importantly entering the market before the release of Sony’s next generation console. Early productions showed that the Play Station 3 would have better technology including built in Blu-ray, however this time it wouldn’t matter since Microsoft had already gained leverage in the gaming market by releasing