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The State Of Wii Preorders
1up has a hilarious article up looking at the state of Wii Preorders across the U.S.. Despite the fact that preorders began (and likely ended) this morning at EBs and Gamestops across the country, the employees of the megalithic game store were less than fully prepared. From the article: "WEST VIRGINIA: GameStop #1330: 'We don't know. I mean, we're gonna be doing reserves. We're just waiting for them to tell us we can.' WISCONSIN: EB Games #4626: 'It looks more like we'll just sell that one. Because there will be 2 to 4 million units available on launch day, and EB/GameStop will be getting 70% of them that first come first serve would be doable. Even a smaller store like ours could be getting upwards of 50 units day one.' WYOMING: EB Games #4294: 'Any day now, man. Any day now.'" Despite my wife's best efforts, I missed out on a preorder by three people in line. Stupid cross-country trips.
I honestly don't know what EB Games is up to ...
... Why could I pre-order a Gamecube in July in 2001 at Futureshop, and a month before the system launches I still can't pre-order at Futureshop or Best Buy?
Back in 2001 I pre-ordered a Gamecube at Futureshop and when I walked in they must have had (at least) 50 Gamecubes in a pile and everyone who pre-ordered ended up with a system; today, the Wii is launching with (about) twice as many systems as the Gamecube did and EB Games are averaging 10 systems per store for to pre-order. It seems that something is off to me, either EB Games is getting screwed on the number of systems they're getting, or they're purposefully limiting pre-orders.
Which brings me up to my other question
At 10am I swung by my local gamestop. They said they had 6 units for preorder and they were all gone by 6:30 AM, as there were already 6 people in line. Strange, as the PS3s at the same gamestop had sold out at 7 PM the day the ps3 preorders launched, plus they were issuing 12 preorders. Why are they only issuing 6 preorders for the Wii when there are going to be 2.5x the amount of units? That didn't make sense to me.
I got to my local GameStop (Squirrel Hill location in Pittsburgh, PA) at 8:45 AM, about an hour before they opened. There were about a dozen people in line. Then the EB employee came by, and handed tickets to the first bunch of people in line (not me).
From what I've gathered, they had a lot fewer units allocated than they did for the PS3. When I asked on Wednesday, the clerk said those had sold out in about 15 minutes. It's kinda odd, considering that the Wii's going to have about 10x the availability. My guess is that Nintendo is purposefully avoiding selling the majority of their hardware as preorders. They want to get the hardware into the hands of the general public, not the sorts of people who read gaming sites or get email notifications from EB. It makes sense, though, when you consider how vital Nintendo's market expansion plan is to the system's success.
These things are "shortaged" at launch primarily because they're afraid of matching supply and demand principles. A shortage is what happens when demand outstrips supply but prices don't rise. The nature of manufacturing a new product is that you can't make a million of them instantly. You build say 100k a day. I guarentee you two weeks ago there were finished Wiis sitting there waiting for enough friends to make launch numbers. In a perfectly free world market, that first lonely Wii would have been sold immediately, to the highest bidder. But you can't set the price for all Wiis like that. You'd only sell 1! And there's regulations that prevent you from offering two people different prices for the same thing.
What you could do to keep demand in check is sell the first group for high dollars, and as those willing to pay 750 dollars for a Wii dissapear, lower the price, wait for those people to buy, and repeat until your price is as low as you're willing to go on it. This isn't done for a couple reasons. 1) Being the first to do this would drive your customers to competitors 2) Consumers would cry out how unfair the price was a week ago, and early adopters who didn't anticipate a sudden drop in value would vocally feel screwed. 3) Pricing on the high side risks NOT selling out.
That third risk is probably the most dangerous for a platform that needs support from 3rd parties. To sell as many games as possible, you want as many installed users as possible. Rather than risk choking demand for the platform and watching software sales plummet, they err on the side of caution, and leave nickels on the ground for retailers to pick up by managing their inventory. Ideally, you mass enough consoles to launch fairly to a region, so distribution and supply of games is simpler and your advertising campagn is a simple "buy on november 17th" or whatever, and then everyone who wants one goes out and gets one, because you produced exactly that number and no more. If fake shortage news like deliberately undersupplying preorders drives up total sales, then you do it for the health of the platform.
So basically, theres a shortage because they don't expect to make as big a profit on selling systems as they do selling games, so finding ways to sell as many as possible is their goal. Determining what is and isn't a shortage can be difficult, but ebay is usually a good indicator.
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I'd just like to relate my preorder experience. I saw /.'s posting of the story at about 11:30 (Central). Wasn't really planning on preordering but figure WTH and started calling. The third closest EB/Gamestop to me (still within 5-10 minutes) had two left. Futzed around a bit and then went over there. Got there at about 12:30 and there was still one left.
So, all in all pretty easy for me.