Xbox: NOT this year's Buzz Lightyear

Any hopes Microsoft may have had for shifting its Xbox consoles in serious numbers this Christmas may have gone up in smoke with news that sales during November fell dismally short of expectations.

Banc of America Securities analyst Bob Austrian said in a research note to clients last week that he expected the console to sell 700,000 consoles in the US in November, while the actual sales figures from NPD Group amounted to only 468,000.

Microsoft has been trying, with little success, to catch up to market leader Sony, whose PlayStation2 user base is ten times larger than that of the Xbox. Austrian predicted that Xbox sales for the Christmas quarter would amount to $700m (£448m), down from a previous forecast of $1.1bn.

The slow sales will not impact Microsoft's bottom line, since the company loses money on each console sold, according to analysts. In fact, the machine's installed base is now large enough that lucrative software sales could soon begin making a positive impact on the company's balance sheet, according to a report last week.

Microsoft was not immediately available for comment.