The port lockout, which President Bush put an end to yesterday after ten days, created a log-jam of cargo ships from overseas. Among the items trafficked by those container ships are Asian-built electronic components used by a manufacturing plant in Mexico to build Xbox consoles, as well as Gamecube and PS2 consoles making their way to store shelves across America.
The port lockout, which affected 29 ports from Seattle to San Diego, has resulted in a backlog of cargo that will take at least six weeks to work through -- and could last well into the holiday shopping season.
For Microsoft, which is launching its Xbox Live service next month, that could spell even more trouble than for Nintendo and Sony. It is counting on having enough consoles on store shelves to meet the increase in demand that Xbox Live will generate, and the company is considering whether to take the expensive step of flying in parts from Asia if shipping lines can't deliver those components in time.
Analysts have already lowered their earnings forecasts for toymakers Mattel and Hasbro, and for retailer Toys "R" Us, based on the assumption that the holiday selling season will be impacted by the labor dispute.