Who’s the Grinch? Microsoft or the Media?

Is the world's most successful company committing one of the greatest inventory screw-ups ever? Or is the Xbox shortage just a shameless publicity stunt?

It wouldn’t be Christmas without endless media stories about desperate parents scouring store shelves for the must-have but impossible-to-find toy-of-the-year. In case you haven’t heard, this year’s hot item is Microsoft’s new Xbox 360 game console, and it appears that come Christmas day, a lot of kids are going to be left wondering why Santa Claus failed to deliver.

The big question, though, is why Microsoft has failed to deliver. Is the world’s most successful company committing one of the greatest inventory screw-ups in corporate history? Or is this a shameless publicity stunt designed to create “buzz” and stoke demand? Unfortunately, the reporters we depend on for answers have been stingy with the facts.

Consider the glaringly mediocre “ABC News Original Report” on the often-reliable network’s Web site Thursday. “Xbox 360s in Short Supply,” reads the (hardly original) headline over a story that proceeds to attribute this shortage to “a lack of inventory.”

And how does ABC know that there is a lack of inventory? Well, for one, the Rocky Mountain News video game editor told ABC that he was “getting emails every day from people saying, ‘Where’s the 360 that I pre-ordered?’” So ABC found another journalist to confirm its hypothesis that there is an inventory shortage.

To back up this “evidence,” ABC reports that Microsoft gives retailers only “a certain number of units.” And that’s not all: An unidentified employee who answered the phone at a Gamestop shop in New York said his store was anticipating a second shipment “of just two more 360s.” Moreover, Debbie Mola, a spokeswoman for the retailer EB Games, “says she wishes they had more to sell.”

ABC can’t get more specific than that, it says, because Microsoft refused to disclose any numbers. What ever happened to the notion of reporters finding the numbers themselves? Too hard, so instead ABC quotes an industry analyst named Ross Rubin who estimates that there will be “under 400,000 units sold” come the end of 2005. How does Rubin know this? Does he have the numbers that Microsoft refused to disclose?

Of course, ABC doesn’t even attempt to explain what gross error in planning or production caused the inventory shortage. Which is just as well, given that it utterly fails to convince us that any shortage actually exists.

So what about the possibility that Microsoft is deliberately limiting the supply of Xboxes in order to stir up publicity and stoke demand? That’s a theory that USA Today posited last week when it noted that “Microsoft benefits from the hype created by quick sellouts.” But the paper’s story offered no evidence of a coordinated publicity stunt. Nor, for that matter, did it support its claim that Microsoft is benefiting from the supposed sellouts.

On Wednesday, Reuters reported that Microsoft CEO Steve Ballmer “will have to shop around for an Xbox 360 game console this holiday season just like the rest of us — it doesn’t come with his job.” According to Reuters, Ballmer “quipped” that the “Ballmer children do not have their Xbox 360 yet. I’m in the same boat as many of you.” Are we to take this statement at face value? Reuters does. Could the choice quote have been designed to feed the frenzy? Reuters doesn’t ask.

These examples of bad journalism would be less disconcerting if it weren’t for the fact that virtually every media outfit in the country, and several outside the country (including the Toronto Star and Britain’s Guardian) have delivered equally vague reports.

So, one way or another, the media is allowing Microsoft to pull a great big stocking over the eyes of the public. And that is ho — ho — horrible.

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Edward B. Colby was a writer at CJR Daily.