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Analysts Claim Slowing Demand For Xbox

Two Wall Street analysts are saying that Xbox sales are falling short of Microsoft's expectations, based the observation that Flextronics, the company that manufactures the console, has slowed its output of the console.
Analyst Chris Whitmore of Deutsche Banc Alex Brown said that Flextronics has cut back its production of the Xbox in response to slowing sales, and that in turn could put Microsoft's goal of shipping 4.5 to 6 million units worldwide by June 30 out of reach. Another analyst, Paul Fox of Banc of America Securities, wrote to his clients that "Xbox momentum is slowing from an easy start." Microsoft executives declined to discuss specific numbers but said that the company is happy with sales so far -- with the exception of Japan. In an interview with Reuters, Xbox director Robbie Bach explained that "Japan is going well on the software side and probably is a little behind where we want to be on the hardware side." Microsoft will release its Q3 earnings report next week.

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