1.5m Xbox 360s to ship by year end, analysts agree

Microsoft has given no official shipment estimates for the Xbox 360 as yet, but analysts are this week converging on 1.5 million units as the most likely figure for global shipments of the console by year-end.

Two key investment banks issued revised guidance for Xbox 360 shipments earlier this week, with Banc of America Securities maintaining its estimate of 1.4 to 1.6 million, while UBS Securities dropped its original estimate of 2.5 million to 1.5 million.

The revised estimates came after IBM confirmed that it was ahead of its targets in terms of manufacturing the PowePC-based chips used by the Xbox 360, with the chip maker set to meet Microsoft's requirements for the part in the current quarter.

Despite the positive news from IBM, both Banc of America's Gary Cooper and UBS' Mike Wallace maintain that shipments of the Xbox 360 will be significantly lower than many observers expect - with their conclusions being based on information from retailers and industry insiders.

The two analysts also agree to a large degree on where those units are going to go; Cooper expects that by the end of 2005, there will be 800,000 units in North America, 600,000 in Europe and the remainder will be in Japan, while Wallace also expects 800,000 in North America (350 to 400k of those on the launch day), with 400 to 500k in Europe and 100 to 200k in Japan.

Microsoft itself has repeatedly cautioned the industry that it expects the Xbox 360 to sell out ahead of Christmas, but has moved to assure retailers that there will be a steady supply of new units turning up in the weeks and months after launch.

While the analyst figures tend to suggest a slower than expected start for the Xbox 360, they're by no means negative for the industry as a whole - with sales of handheld and current-gen console hardware and software bound to make up any shortfall.