Local Xbox distributor goes bang

By Nicola Mawson for Microsoft
Johannesburg, 02 Jul 2009

Microsoft has confirmed its Xbox console distributor, MiDigital, has been placed under liquidation.

Product marketing manager for Xbox SA John Press says Microsoft has been notified of MiDigital's liquidation and is in the process of moving the Xbox to a temporary distributor. He says Microsoft has had little information as to why its distributor has been shut down.

“As far as we know, there were some investment partners that did not follow through with their financial obligations. Apart from that, they haven't shared any more information with us yet,” he adds.

ITWeb attempted to contact MiDigital and its holding company, Music for Pleasure, to determine the details of the liquidation. However, neither company's switchboard was answered.

Stock troubles

Colin Berger, director of Powercare, the company responsible for maintenance and warranty for Xbox locally, says MiDigital staff were locked out of their offices by the sheriff on Monday.

The company seems to have been in trouble for some time, and some retailers have had problems getting their hands on stock. Edcon Group's CNA retail chain says it has battled to get stock for three weeks.

Patrick Raymond, CNA merchandise executive, says there is a hiatus in the supply chain and Xboxes are not being delivered. Despite the credit crunch, entry-level Xboxes are still a popular retail item, he adds.

Resilient SA gaming

Earlier this year, Musica, Look & Listen and Incredible Connection had similar trouble finding stock of the console.

At the time, Microsoft explained the economic climate had made it difficult to forecast what stock levels should be kept. It also explained the South African gaming market had been particularly resilient to the effects of the financial downturn.

Last year saw Xbox increase its sales by 48%, which placed it as the best selling console in SA over the Christmas period.

Alternative plans

Microsoft says it has several distributors it can use immediately; however, it will only be a temporary measure.

According to Press, the distribution rights for the popular console will go out on tender as soon as possible. “It's difficult to say when the tender will go out, because there are many aspects and details we will need to finalise beforehand.”

Despite the loss of the distributor, both Microsoft and Powercare have reassured customers that the warranty and maintenance of Xbox are ongoing and will be upheld.