European Xbox Production | The short lived Hungarian manufacturing plant

As the Xbox approached ever closer to it's European launch date, Microsoft saw a great opportunity to shift manufacturing the Xbox to a European plant in Hungary. From the 29th of November, the Hungarian plant was fully operational and ready for it's development of Xbox systems. The plant was over 10,000 square meters and operated 24 hours a day, 5 days a week, producing a very impressive 15,000 consoles a day at a rate of 2 consoles a minute. Before expansion and production began, the plant was already boasting an impressive 2.6 consoles a minute and 600 boxes an hour. It felt like a proud occasion as it would be the first video games console factory ever located in Europe, alongside providing 2,000 employment opportunities within Hungary. As the first Xbox's rolled off of production, the Hungarian Government was there to watch.

Sandy Duncan, Vice-president of Xbox operations, projected to sell 1.5 million Xbox units by the end of June 2002 from the newly Hungarian manufacturing plant via weekly replenishments. Not only was this deemed important for European operations, but operations would see them manufacturing 43% of all Xbox units worldwide. The plant would work alongside Flextronics Xbox manufacturing facility in Guadalajara Mexico to manufacture North American consoles initially before switching production to focus on the European Xbox launch of 14th March 2002.

Inside the Hungarian manufacturing plant

However despite the enthusiasm and optimism set out by Microsoft, the manufacturing process was short lived. Just a few months later on the 15th May 2002, it was announced production in Hungary was to cease operation of the Xbox console. Manufacturing shifted elsewhere and as you probably have guessed, manufacturing moved to Doumen China instead. Microsoft states China provides ideal working conditions as well as being more cost efficient, which isn't surprising given Chinese manufacturers would earn a measly $0.70 an hour at the time.

However this move did come with it's benefits, as Microsoft wanted to aggressively market the Xbox at a much cheaper price. Roughly one month prior to the announcement, they swiftly cut the Xbox price from £300 to £199 in order to be more price competitive against the £150 GameCube released on the 4th of May and the PS2 which retailed at £250.

Looking back, what was once an optimistic occasion filled with enthusiasm and prosperous job opportunities went the way of modern manufacturing standards. It's an interesting story that ultimately contributed in the Xbox price cut and propelled the Xbox into becoming a major competitor in the gaming console business.

Archived Links:

• http://www.eetimes.com/document.asp?doc_id=1220617
• https://www.wired.com/2001/11/flex/ 
• http://www.internetnews.com/bus-news/article.php/1129171/Flextronics+Relocates+Xbox+Manufacturing+Facility.htm
• https://news.microsoft.com/2002/05/15/microsoft-and-flextronics-to-open-xbox-manufacturing-facility-in-china/
• http://news.bbc.co.uk/1/hi/entertainment/1936791.stm 
• http://www.geek.com/games/sony-cuts-ps2-price-in-uk-546976/

Links:

• http://www.eurogamer.net/content/pr_xboxproductioneurope
• http://www.coremagazine.com/news/5364.php3
• http://eurogamer.net/content/pr_xboxineurope