Nintendo planning to milk its Wii shortage through the holidays
By Paul Miller 
posted July 12th 2007 7:39PM
posted July 12th 2007 7:39PM
posted July 12th 2007 7:39PM
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No matter how you cut it, demand that exceeds supply is a good thing for the company's bottom line( ie, sales and earnings). While Nintendo is enjoying unprecedented growth, MS and Sony are trying to maintain sales but would prefer to see profits.
The public doesn't need to know any better about which product is superior or how much supply is available. It knows what products it likes and the prices that are comforting. And the stock market can be very rewarding to a company that connects with it's market.
The consumer wants more Nintendo. MS and Sony wants more consumers. Unless things change drastically this fall and holiday season, Nintendo will probably do just fine.
For what little it's worth, yesterday at the Costco in Albany, Oregon, they had Wiis. It was a good deal, too -- $329 for a Wii, plus an extra remote and Mario Party 8. If I didn't already have a Wii I would certainly have snagged one. They had at least 15 of them on the display, too. It's the first time I've seen them in a store.
That statement confirms so much.
The reason the Wii is selling is because in comparison to all the other systems, it is the cheapest. People that dont even know about it buy it for their kids just because they dont want to spend 399 on the next type of console (core not included, because salesmen always push the fools into the 399 version, and make you feel guilty for not getting that one). That, and its very kid friendly.
But as soon as you sell it at a price higher than that (say 349 - 399) no one wants it. I can absolutely guarantee you that if this console was around 349 - 399, it would be collecting dust just like the PS3. The hardcore fans would have theirs, but casual gamers cant justify that much money on something they intend to use "every now and then".
im aware of this
I'm still not sure it's an artificial supply problem. After all, it's still selling much better than any of the other systems except the DS, which would lead us to believe that they're actually pumping them out as fast as they can.
Just saying.
lol. you people need to lighten up.
It's always refreshing to see a site so interested in gadgetry be so ignorant of how it's made, as if a factory springs forth instantly (or even in a few months - NOT going to happen) bearing unlimited quantities of Wiis.
Bottom line: Everybody and their moms want a Wii. Really. You cannot just call your contractor up who you contracted some time in advance for one million systems a month and say "Hey Bill...we've got a pretty popular system, can you build, oh, 2 million a month instead of 1? Um, oh, starting next week by the way. Kthxbye." Assembly may not even be the issue. Perhaps the constraining factor in production is an IBM or ATI part. What do you do then if they're already running at capacity? Call them up and tell them to build a new fab for you?
This is not an artificial shortage. It's just tremendously popular. And if Nintendo is in pain or trouble because of this, sheesh, I'd like to share in their pain.
P.S. To all the supposed people bored with their Wiis, chances are you can recoup nearly all or perhaps more than your original investment on ebay even with a used unit.
You guys are being pissy about nothing. NIntendo is not "artificially constraining" anything. As several people have pointed out, they are selling a million a month. That is a *lot* of systems. Now if they were barely trickling out, that would be a serious issue.
The only thing they could do now is buy more capacity from another manufacturer or build more capacity of their own. Either of these options are a serious capital outlay. And no one can possibly count on a product continuing to sell at that pace.
And can someone please cite examples of this "Well...yeah...uhh...you just wait another year or two and the Wii will be in big trouble!" ?
Anyone?
Can someone cite an instance in console history when on console has *vastly* outsold another for a *year* (or two) and then went on to "lose"? I can't think of any. The Super Nintendo, after Sega basically stopped manufacturing the Genesis, finally pulled even in sales but I can't think of any example remotely like the one so many people on this board keep positing.
Again, if I'm wrong, fine. Give me the example.
What shortage?
I live in Connecticut and they are even selling Wii packages at COSTCO.
I went to 5 retail electronics stores in my area and ALL of them have the Wii in stock.
putting consoles in stores aside, i think nintendo's bigger problem for the wii is making a game that sticks. i only play wii tennis. i can name a few other guys who stick primarily to wii sports. zelda got old, madden sucked, wii golf owned tiger woods, call of duty was too inaccurate... and why the hell am i paying $7 for old NES games? i think this system is going to lose a lot of steam fast.
but that all depends on smash brothers...
- holla
well according to vgchartz which has shown to be very close to real numbers everytime full numbers have been revealed has the will at over 9 million wii's sold.
the wii has been out for 9 months which means nintendo is getting and selling 1 million wii's a month.
so that means at current rate they will sell another 5 million by the end of the year and be to 14 million wii's sold.
yet people complain saying that nintendo is holding back? give me a break. the wii is selling amazing. the demand has not dropped, which is why wii's are hard to get. nintendo ramped up production and they still aren't meeting demand.
some of you don't understand and underestimate the way the wii is selling. its not just selling out in a couple regions its selling out in all regions. which is why they are having a problem meeting demand. its unheard of for a console to do this.
When I worked on their advertising account about 10 years ago (in Australia) I know it was company philosophy to supply below demand levels.
The idea was that this made the demand appear bigger, and that they were happy to wear the flak from p-ed off customers for all the good 'massive sales/sold ut' press it generated.
Seems nothing's changed.
This is going to come back to bite Nintendo in the ass.
I could completely understand Sony having an initial shortage due to the blu ray drives, however Nintendo has NO excuse.
Nintendo: "Oh we're sorry but we're having trouble getting old/cheap technology to build our systems!"
my thought of the moment:
microsoft should take a play out of the Wii's book and add an SD memory slot or two to the 65nm 360 refresh. that way the cheapest console is actually a viable option. not to metion an easy 1080P photoslide show. no need for a media center hookup.
and a million consoles a month... that seems like a ton to me. It obviously makes sense to be tight on the demand and have some angry customers than end up with way too much supply and an angry bottomline.
...though now i need a wii to match my new Sharp 37GP1U
Buy a $10 USB SD card reader. There you go.
it is kinda annoying to see so many people act like they know what they are talking about... specially when they are all disagreeing...
i'll admit, i know absolutely nothing about marketing, so i'm not ganna bother shoving my 2 cents into an already overflowing pot of ideas about their production or marketing or "is it all just a ploy?"... anyway, i'm a ninteno faithful, and i have hopes that they will win through in the end... they've played it smart tech wise, and marketing wise (so far as i can tell) and i really think they stand a chance of being ontop of this generation's console wars.
I buy about 2 games a month. If I had a Wii, some of my games over the last few months would have been WII titles. When I finally get a WII, there's 2-3 games I will go back and buy, the rest are all *LOST SALES* for Nintendo that they will never recover, money that has gone on 360 titles. Not to mention lost accessory sales. Nintendo have to know they're losing a lot of revenue in lost game sales and would probably prefer to get as many consoles on the shelves as possible.
This is not that hard. They already told us quite a while back that they would be selling exactly 14 million Wiis this (fiscal year). That works out to just over a million per month. Or maybe they'll release some extra in December. But they've already stated their goal and that's what they're going to hit, no more no less, just like they hit last year's 6 million.
The next time you'll see production increased is May 2008.
I have no doubt the Wii "shortage" is total, Nintendo-fabricated rubbish. If the perception is that Wii's are scarce, people will want them more - even if they don't really want them!
This way every time Nintendo releases a batch of Wiis, it'll get major advertising exposure (Wii in stock this Sunday! 10AM! -- No Rainchecks!), continued news exposure, and keep it in the consumer consciousness.
Mind you, it's a great marketing strategy -- and by-and-large, it's working. But it's total BS. And keeps attention away from the fact that, aside from Zelda, the Wii doesn't have many games worth plunking down the $249 admission fee.
well its really good that the wii is selling CUZ they r making A MARKET FOR THE PS3 AND THE XBOX 360......casual gaming is fine but after some time u get sick of , a person wants more,more graphics more power...........it's like learning how to drive, at first u dont care but later u keep on demanding for better and better cars, SO THANK NINTENDO FOR MAKING A FUTURE MARKET OF GAMERS FOR SONY AND M$!!
warrior:
i dont think no matter how much my mom, grandma or even da like the wii.
they will never be interested in more "serious" consoles.
Yep, I even wrote to Nintendo UK to complain along these exact lines and got the standard boilerplate reply. Either they are being incredibly ineffecient or they believe that these shortagess benefit them - either way it is a PITA!
Wiis are stacking up at local (German) retailers, just like Xbox 360 and PS3. No shortage here.
I work for Nintendo, at the wherehouse in North Bend, and let me tell you, there hasn't been a day since the Wii launched, that I have not seen Wii's go down the belts(provided that trucks were going out that day). Seriously, we've got pallets of them sitting on the main floor, rather than on the shelves because they are moving that fast. It's not like production has slowed down or we're holding back, they are just selling that fast.
As far as microsoft dropping a price to compete with the Wii, I think nintendo will eventually reduce costs in building their system too, resulting in their own price drop. I mean, the Gamecube went insanely cheap compared to what it started off at.
Also I don't think this shortage is worldwide either, because in Ireland all the gameshops seem to have wiis by now.
They are certainly suckering people's buy impulse with "hard to find" status.
Nintendo is meeting their announced shipment goals, and unlike MS and Sony are actually selling out every single one of them. Engadget, I think you're gonna need to change your tune on this 'shortage' thing soon, since at this point most people can see clearly with posted sales numbers that Nintendo isn't playing with artificial scarcity.
It's all about VEGONOMICS @ LMAO
Seriously, check this strip out from long ago...
http://www.vgcats.com/comics/?strip_id=212
Nintendo needs to be careful not to shoot itself in the foot, Microsoft and Sony have started to think about redesign and costs, Sony or Microsoft may re-design their consoles to cut costs.
Nintendo needs to supply a huge amount of Wii's alonside for the holliday, especially if they're going to release big games like Super Smash Brothers and Super Mario Galaxy.
Otherwise releasing these games will be a waste as only current Wii owners will enjoy them instead of making these games system sellers.
Since demands high and supplies low, Nintendo needs to take advantage of the Demand+System Selling games which will equal being number 1.
Again if Nintendo doesn't do this worldwide, only current Wii owners will benefit.
Those who haven't bought a console may opt to buy something else when Wii's aren't available, suddenly the frustration of waiting for one, will be cured with Halo, GTA, Metal Gear, having a blu-ray player. Sony and/or Microsoft may benefit in the end.
Currently Nintendo doesn't need these games (Smash Brothers, Mario, Metroid) to sell systems, but they will need more systems to accompany these games.
What shortage?
Wal-Mart has Wii in stock online on most days:
http://www.nintendo-wii-consoles.com
I don't think America is getting as many as other countries. The Wii is in stock in most stores and online stores in the UK. There is a 44% premium over the U.S. price, but that's nothing compared to the 70% premium of the PS3. Maybe Nintendo is looking to lock down Europe before switching the supply to America.
if we go back to the article we see:
"There is no guarantee that we are not going to have 'out-of-stocks' this holiday season," George Harrison, senior vice president of marketing and corporate communications for Nintendo of America, said in an interview. "If you see one, buy it. Don't assume that you can come back later and find one."
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WE SEE MARKETING SPEAK. MAKING SOMETHING SOUND MORE SPECIAL THAN IT IS. I CAN'T FAULT THIS, THIS IS THE GUY'S JOB, EVEN IF A BIT EMBELLISHED.
Harrison added that the company was ramping up production, but that parts manufacturers were still trying to gauge how much they need to produce to keep up with demand.
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I'D AGREE WITH THIS. SALES HAVE BEEN BRISK ON ALL METERS OF POPULARITY.
"We're trying to figure out what's the reasonable monthly level, and as we've seen every time we ship product to the market, whether it's in Japan or here in the U.S. or in Europe, it sells out in a matter of days," Harrison said.
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EVIDENCE SEEMS TO SUGGEST THIS IS GENERALLY TRUE.
The Wii's quirky remote and a relatively low price tag have made the Wii stand out compared with the powerful Xbox 360 from Microsoft Corp.
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I CAN AGREE WITH THIS FOR SURE. THE NON-GAMER CROWD IS WHO THEY ARE ATTRACTING.
So really, I think there's a lot of truth to the message here, not artificial constraints. Of course embellished a bit by a marketing guy (as expected).
It may simply be an answer to price cuts?
The answer being No.
Risky strategy, because we are likely to see a
Christmas Core 360 @ $250, with demos and arcade games.
Plus, the longer Nin delays, the more time MS has to drop a
motion gadget/simplistic games to steal the fire.
Or worse, serious motion integration into serious games.
Any way it works, these are great times for gamers.
Ramp up production = increased staff and expanded facilities
Eventual sales slide = layoffs, empty buildings, and bad press
Smart decision, Nintendo, IMO.
nintendo has no need for smooth earnings. they're a game console company - it's normal that they have swing in the earnings.
better argument would be that they don't want to buy expensive factories when the wii sales will not of course go on forever at high volume - this is however a bs argument because the name of the game nowadays is to outsource such manufacturing anyhow(and they've had time for that).
they're just keeping that image in usa(that it's so hot you have to buy it right away if you happen to be lucky enough to see one..). around here(europe) and asia they're plentifully available, buying one is as simple as deciding one day that you want one and going through couple of electronics stores(not all sell consoles at all). been like that all spring after the first month or so after launch.
OK. I've been waiting to say this:
NINTENDO: I was initially *really* interested in getting a Wii... not just for myself, but one for my nephews, and one for my mom. This was prior to launch.
Now, seven months later, I have yet to actually see a Wii console in ANY store. I decided two months ago that I don't want one anymore. I don't care. You missed the window of opportunity with me, and I'm just not going to bother with your console. Ever.
I'm not kidding. If you can't be bothered to get the console into stores, then I can't be bothered to seek one out. I'm not going to hunt high and low, or pay higher than retail. I'm not going to find an online retailer who will screw me out of "handling" fees or make me buy a bundle. I'm not going to go on any waiting list. I wanted to walk into a store sometime in the beginning of 2007 and walk out with a Wii or three. It never happened. Now, thanks to your bullsh!t fake shortages, it never will.
This "if you see one, buy it" stuff is CRAP.
I've completely lost interest Nintendo, and it's all because you thought you could keep up this fake shortage and hype the damn thing. I don't appreciate being played for a chump, and I don't appreciate being lied to.
F*** you, Nintendo. You've lost a customer.
What do you mean you can't find a Wii?
There are tons on ebay. I bet 1/2 of the Wii shipments end up in the hands of store employees who flips them on ebay for money. Why would anyone work at Gamestop for low pay, the real pay is this.
It's not like there is a "real shortage" of Wii systems. In fact, just go to any Nintendo of America store located near you. They get deliveries of Wii every morning, but are usually sold out by 10 or 11am. They are just saving all profits for themselves instead of allowing third party vendors sell the products. Smart if you ask me, which no one did.
I just bought a wii yesterday for 201 dollars with a trade in of my gamecube and 2 games at gamestop. They had 10 in stock and I went back today for a game and they still had 5 left.
Wow! Shortages for 9 months, soon to be a year! This has to be one of the biggest supply chain screw ups ever! Is the device that unique where the components are that unique?