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Microsoft Warns Of Xbox Shortages

The software maker says strong holiday sales of Xbox 360 and Kinect could mean inventory levels won't be enough to meet demand in early 2011.

Microsoft said record sales of its Xbox 360 gaming console during the holiday season could lead to a shortage of the devices in the coming months.

Microsoft sold a record 1.9 million Xbox units in December, as demand was driven by the popularity of the console's new Kinect hands-free control system. To cope with the demand, Microsoft said it diverted inventory meant for January and February sales into December.

"In order to keep up with holiday demand in December for Xbox 360 and Kinect, Microsoft pulled units from its January and February production," a company spokesman said, in an e-mail to the Seattle Post-Intelligencer.

Kinect was a major bright spot for Microsoft in 2010, a year when it suffered setbacks in other consumer areas, such as tablets and mobile phones. At the recent Consumer Electronics Show in Las Vegas, Microsoft CEO Steve Ballmer said it's possible the company will eventually extend the technology behind Kinect to PCs and televisions.

Microsoft launched Kinect in November of last year, and sold more than 2.5 million units in its first 30 days on the market. Microsoft is offering Kinect bundled with a 250GB Xbox 360 for $399 while the 4GB version is selling for $299. The Kinect sensor bar is also available as a standalone product for $149—provding it's not sold out.

The Kinect bar features a camera, audio sensors, and motion-sensing technology that tracks 48 points of movement on the human body. That means players can control on-screen action simply through physical gestures and verbal commands. The sensor bar is designed to plug directly into the Xbox 360 console.

The circuitry behind Kinect is also making its way to the PC market through non-Microsoft channels. Prime Sense, an Israeli startup that developed the motion-sensing chips used in Kinect, has licensed the technology to Taiwanese computer maker ASUS.

ASUS has embedded the chips in its new WAVI Xtion media center, which adds PC and Web capabilities to flat-screen televisions. The console lets viewers control on-screen menus and surf the Web through simple hand gestures.

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