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1 Million Wiis To Be Sold in U.S. By December
Gamasutra reports on comments by Nintendo's Reggie-Fils Aime, who is claiming the company will have sold 1 Million Wii consoles by December 1st. From the article: "Nintendo's previously stated plans called for the company to ship approximately 4 million consoles globally before the end of 2006. It is not clear whether the new figures stated by Fils-Aime are still in line with these numbers, since no estimate for Japanese or European sales were given. Sony's plans call for 1 million consoles sales in the U.S. by the end of March, 2007. When interviewed by Reuters, Fils-Aime also commented on the potential lifespan of the Wii, suggesting that a four, five or even six year lifespan was 'just about right.'"
Is there really any question that Wii is going to sell a million units if their available? PS3 would do the same at over twice the price...
Dedicated Cthulhu Cultist since 4523 BC.
Think of it like this: if I spend $1000 on stock, I didn't "lose" $1000 - I invested it, with the hopes of getting more than $1000 back at some point in the future, but my returns are not guaranteed, just as Sony's returns are not.
You're more or less right, but there is a difference. If you invest in stock you get something, stock. You made a purchase that may or may not increase in value. When Sony loses money selling consoles they don't have anything. They have arguable increased their potential of selling games and movies. Thus, it is more like paying for advertising than it is investing in stock. This doesn't mean that the return is less likely, only that what they have purchased is more ephemeral. It also means their expenditure may be more exploitable by individuals who happen to want just that hardware, but who don't want any games or movies.
O.K. so they're sold out and Nintendo says more are coming. Great. But I don't want to spend the next few weeks driving around from store to store looking for one. I'd rather just go to Nintendo's website and order one directly and wait until it is available and ships to me without any hassle. But no, there's no way that I can see to order directly from Nintendo. Instead, a consumer MUST use a local retail outlet. Unfortunately, none of the outlets I visited are taking any orders. If they're out of stock, that's it. No other option. This sucks. Why cant they do some kind of 'pay now and we'll send it to you when it's here' ordering process.
- James
I think the GP's point is that you can buy stock, and if you need/want you can resell it and get your money back give or take what has changed. The Money Sony "spent" on console losses cannot be re-sold, similar to advertising you can't un-advertise something.
You also have to consider that it takes quite a hefty amount of game and accessory sales to make that $300+ back. Licensing for 3rd party titles is about $8 a pop, and Sony has arguably the weakest 1st party support out of the three major players so most of their games sales will be for 3rd party games. Even if you consider accessory markup around the 40-60% area you can only sell so many controllers and AV cables before people don't need to buy any more. Blu-Ray movie licensing is probably nothing compared to that of games. They're probably banking on PS3's helping move the format and thus the players that they can make money on. Unlike Microsoft they don't have an online service that brings in money, they also don't have memory cards to bring in money, or a network adapter accessory, etc.
Thinking about it further this money spend really is more like advertising then anything else. They're just doing what they can to get the console out there, to start the word of mouth and get people interested and excited about it so that when there are more games available and the consoles are easier to track down, and Sony's losses per unit aren't as high, they'll sell more of them. It also boosts word of mouth and desire for the Blu-Ray movies which in turn boost sales of the Blu-Ray players that they can make money on. It almost works to their advantage to have so few units out in the wild because it buys them time to reduce the cost of manufacturing, drives up demand from the short supply and the console is still out there for people as a tangible object.
Collector's Edition
One thing that pops to mind is the fact that Microsoft has been far, far worse about keeping its promises of backwards compatibility than Sony has been thus far. That fact is mentioned nowhere in the article. Of course, the article is not an editorial and thus wouldn't be expected to mention such a thing, but it does reveal the biases of the AC who linked it.
Rob
Console manufacturers need the stores' support. They won't compete with them. If Nintendo opened an online store, stores would stock less games and consoles and give them less shelf space. People going to the stores would perceive Nintendo to be the smaller brand and would buy other consoles instead.
It looks like you're using Sony's worldwide launch numbers, but Nintendo's (completely speculated) U.S. launch numbers. Why?
"Everything you read" says Sony shipped 400,000 -- okay, though there are lots of rumors to the contrary I don't know of documented evidence otherwise -- the main documentation seems to say that there are no verified numbers... but, like many reporters you seem to accept Sony's advance numbers by default (despite widespread reports that shipments were short). On the other hand, no definite numbers are known for Nintendo yet, so you... reject Nintendo's numbers and go with lower numbers you made up. Without even the short shipments rumors as in the PS3 case. Why? Are you aware of even one single store that had fewer than twice as many Wiis as PS3s? Most of the margins seem to be well above that, though of course the dust has not settled yet.
I had thought that the Wii was going to be 4 million units strong yesterday.
Why did you think this? Nintendo never said this. Nintendo said 4 million by the end of the year. It's unreasonable to be disappointed in Nintendo because you misread the press releases.
Based on the launch day alone, it looks like there was much stonger demand for the PS3.
You made up your numbers backing this up, and I'm unclear how you define yesterday as "leisurely"... fewer people shot at/robbed? Okay, I'll give you that, but it seems like most stores were still sold out pretty early in the morning, if not right at opening. If it took longer for the sellout to happen than for the PS3, it seems mostly because there were more units available, and more stores with significant numbers of units, so tracking all of them down took longer. Also, people weren't as worried about shortages, and could afford to be less crazy about getting one.
In any case, as basic econ tells us, in situations of inelastic demand (the hardcore fans), "shorter supply" can have effects that look very similar to "stronger demand," and it's very unclear why you're claiming the latter with no real evidence...
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