The Financial Times is reporting today that Microsoft has finally backed away from its initial Xbox 360 sales target of 2.75 million to 3 million consoles.

The company had hoped to reach that goal within 90 days of the system's launch (Nov. 22), but in light of the continual hardware shortages, Microsoft has been forced to look at the longer term picture. As was stated last week during the Consumer Electronics Show, Microsoft is aiming to hit sales of 4.5 million to 5.5 million consoles by the end of the company's fiscal year this June.

Analyst estimates place sales through the holiday season in the area of 1.3 million units, so what's the problem behind the shortage? Microsoft is placing the blame on a lack of capacity and components.

"Nothing's perfect - you've got a complex piece of hardware that includes 1,700 different parts. Every now and again the line will slow down because something's happened and there'll be a component that didn't make it that morning," said Peter Moore, head of Interactive Entertainment at Microsoft. "That's just the way of the beast, particularly when you are ramping up factories from ground zero all the way up to full capacity."

Microsoft is expecting sales and demand to finally balance out by the summer, and the company reiterated the importance of adding another manufacturing partner.

"[Newly added manufacturer] Celestica coming online makes us feel real good about our ability to do 4.5m to 5.5m, and June is important because it's our fiscal year," added Moore.