Nintendo Refutes Wii Shortage

Nintendo has responded to accusations leveled against it earlier this week by GameStop, saying that Wii shortages are due to demand. Nintendo's George Harrison told Next-Gen.biz in a phone interview that "That's not at all the case. We have worldwide territories that are all competing over the available production. The Japan and European markets are doing extremely well with the Wii. People in Japan at NCL [Nintendo Co. Ltd.] are making the best decisions that they can about which products get shipped to which market and when." An EU marketing director is also quoted at GamesIndustry.biz responding to criticism about the lack of new Wii titles, as well as the supply shortage. Nintendo's Laurent Fischer asserts that the company has a 'release it when it's ready' attitude, and that they'll release products when they meet the company's standards.

Comments

LOL @ "Wii Shortage"

[Sciros]

Hehehe that one never gets old.

I also think Gamestop's idea about Nintendo trying to purposefully withhold units is probably wrong... there's some logic there but it's weak given that a lot of people WANT TO BUY ONE right now and it won't really hurt Nintendo any to sell a console now rather than next week...

Re:LOL @ "Wii Shortage"

[Jeff DeMaagd]

When it comes to GameStop vs. anyone else, I think my biases would lean to whoever that other party is. Let's just say that GameStop's retail practices aren't totally upstanding.

Re:LOL @ "Wii Shortage"

[zippthorne]

It's much more simple than that. There is an impulse of demand right at the beginning, and possibly increasing demand following that, but the production is a continuous process. So unless you over-produce (and incur the capital expense of setting up more factories than necessary) there will be a shortage at the beginning, and it will continue until production out paces increasing demand (due to exposure) for long enough to catch up.

Ideally, they will size their production to the continuous demand at middle-of-life to end-of-life, rather than over build and then decommission factories that do not produce enough to break even before becoming unnecessary.

The other option is more liquid pricing, similar to the way airlines do it, to ensure that everyone that wants one badly enough can get one, but this does not help customer goodwill and leads to cries of "price gouging."

Re:LOL @ "Wii Shortage"

[vux984]

No.

Nintendo did a bang up job.

Their launch date was relatively inflexible, they NEEDED to be out of the gate before christmas, both to get the christmas hype, and to be in the running with the PS3 launch.

Next consider that Sony's PS3 launch shortages were largely aggravated by production problems leading to shortages. If they'd had the number of units they wanted to have, and told everyone they would have the PS3 launch would not have been 'un-findable' for weeks. And for quite a while now the PS3 has been readily available. Sony's assessment of initial demand was actually pretty good (excepting the EU launch) but they got screwed by production issues.

Nintendo, by contrast, promised DOUBLE the number of units that Sony did, and they DELIVERED them, and it STILL wasn't nearly enough, and even today 5 months later you STILL can't buy one. Now Nintendo clearly underestimated demand, but even if they'd guessed right they'd have had to have placed there initial orders in early 2006 in order to change anything, because they really couldn't move the launch date much more than a week. Nintendo got taken by surprise by the demand, and then there was little they could do.

Then a lot of people guessed it was just the christmas factor as the Wii became one of the holiday seasons 'hot items' in which case demand would have died off after christmas. Parent's who couldn't get a wii would get something else, and that would be the end of it. But it didn't, and pent up demand still devoured every unit they put on shelves as fast as they can make them.

So Nintendo started making plans to ramp up production because it was clear finally that it wasn't just a christmas hype thing, or the initial launch excitement, but genuine real demand. But ramping up takes time, and now we're approaching april... it will be interesting to see if they can finally get ahead of demand with 6 million+ units shipped, and now increasing the number of units made weekly. Its a problem ANYONE would love to have.

But suggesting Nintendo should have prepared better by having made 6 million? Or 10 million? units is absurd. (Hell we really don't know how many they'd need because they still haven't satisfied the pre-christmas demand - ie most of the people buying them now, have wanted them since before christmas -- we haven't even begun to really hit the group of people that might impulse buy one if they happened to see them in stores because they are almost never on shelves for more than hour out of an entire a week.)

After all, if they'd made 10 million of the things and then sold only 5, they'd be sitting on LOT of expensive inventory. And you have to remember that in early 2006 when they would have had to gauge the demand for their initial orders the jury was still out on whether the wii was a doomed virtual-boy gimmick. A lot of the game sites were disinterested and down on the whole concept. Several developers hadn't really committed to the platform because they weren't sure if it was going to have any legs. And the forums were filled with sony/xbox fanbois shitting on the lack of hd and the specs in general.

Nintendo knew they were trying to appeal to a broader audience than pixel-shader-snobs (the so-called "hardcore gamer"), but it would have been difficult to really gauge what the uptake of that audience would be like. After all non-gamers and ex-gamers, even if you could interest them in a console, aren't likely to be frothing at the mouth like a ps3 fanboy to get one the day it launches.

Re:LOL @ "Wii Shortage"

[Cius]

Okay, I've no clue about the reality of this, but I'll relate "my friend's" story. Not "friend of a friend", just "my friend".

A friend was looking for a Wii, so he hit up Wal-mart. Wal-mart has everything right? Well, not that day they didn't. However, he managed to talk to manager that told him they were supposed to get some in through UPS the next day, a ton of them (my friend said 30 or so). Well, suitably excited, he shows up the next day and asks about them only to be told that they had none. Naturally, he bitched and moaned until they brought out manager. Lo and behold, it was the same manager he talked to. The guy instantly recognized him and told my friend that they did, indeed, have them in (again, about 30 of them) but that they were not allowed to bring them out or sell them yet. He didn't say why, he simply said he couldn't do anything. Well, my friend called him on it, raised hell again, really got on the guy about how he was anticipating their having one specifically because the guy told him they would. Eventually the guy relented and quietly slipped him one.

So, Nintendo hoarding? I dunno. But maybe retailers are up to something. I'm not sure what. Maybe some big coordinated sale like the "guaranteed in stock" thing that Wal-mart did a while back.

Anyway, for what it's worth, that's my story. Do with it what you will.

But, But, I'm Special...

[Dark Kenshin]

"People in Japan at NCL [Nintendo Co. Ltd.] are making the best decisions that they can about which products get shipped to which market and when."

Well I like to take the ignorant and arrogant stance of "It should be in MY market, and it should be here NOW." Unfortunately my talks with these companies are not going so well...

Business people annoy me

[Forrest Kyle]

I think it says volumes about how far removed from the realities of engineering your average "business person" is that releasing something when it's done is viewed as some kind of rogue attitude.

I would rather have 80% fewer games released every year, if each game was well crafted by a team with full creative control who were passionate about what they were working on and had ample time to finish. The only thing releasing a deluge of unfinished but in-time-for-christmas junk accomplishes is it lines the pocket of the kinds of sharks the industry could do without.

Re:Business people annoy me

[The-Bus]

I agree with you, but also note that on the business end of things, that's going to lead to failure unless you're the kind of studio (like Valve) that can shoulder interminably long delays.

I knew one of the developers for one of those really half-assed paintball games from the late 90's and he said they just didn't code for any AI, eventhough you could play against "computer opponents" -- what they had was nothing even remotely resembling AI, just some basic, possibly randomized script.

Who knows if that was the right or the wrong decision.

For licensed games, the title is more important than the content. The game needs to hit when the movie comes out, or when the album comes out, or when there's a new season of the show, etc.

Take the atrocious 50 Cent: Bulletproof game, for example. Vivendi Universal got that game out about 9 days after the movie hit theatres. In their eyes (and they're probably right) releasing it when it was "ready" (2006? Never?) would've cost them more in development time and lost sales than releasing a crappy game.

I wish you were right. I wish the market as a whole looked at "quality" games above all else. But they don't. Licensed crap like Bulletproof (or the nth Pacman or Sonic game) sells based on the name alone. Money gets made, and parents don't care because the (1)6-year old kid playing the game doesn't know any better.

The way for developers to stop making crappy games is to stop buying crappy games. But half a million people still bought the 50 Cent game (and other games like it) so this won't end.

Don't blame the business people. They're just following the money, which comes from idiot consumers. Teams like the one you describe are probably working for the good studios already anyway.

Meanwhile, Microsoft's spokesman, Ringo Starr...

[Channard]

.. commented that there was now an adequate supply of 360 on the market. And that each third console will come with a randomly packaged Thomas the Tank Engine faceplate.

definitely holding back production

[Thanatos69]

Lets look at the numbers, depending on who you go through:

http://nexgenwars.com/
360 - 10.8M
PS3 - 2.3M
Wii - 5.3M

http://www.vgcharts.org/ngwars.php
360 - 9.8M
PS3 - 2.8M
Wii - 6.3M

so yeah, I can definitely see how they are holding back on production given that the system has been out for 4 months now and selling 1.5M a month. Could you imagine if they weren't holding back?

Re:definitely holding back production

[Anonymous Coward]

No, he definitely wasn't being sarcastic. Can you just imagine what the post would read if he was being sarcastic?

Re:definitely holding back production

[AvitarX]

It took twice as long for the X360 to sell where the Wii is now. I hardly would call that getting their act together.

Nintendo was doing better at the end of December than Xbox did at the end of March.

Nintendo has had something like this before. Shortages on massivly selling items reaping them massive net income.

The only console that was doing this well at 4 months in the US was the N64 (I only looked at the US market) and it was a stagered launch so it is not quite the same thing.

Nintendohas produced a massive amount of Wiis, more than any other console at this point in its life (I am making this as an assumption, but would bet at least 4:1 on it).

Re:definitely holding back production

[ClassMyAss]

The Wii, and less than half the price, has only sold about twice as many units as PS3s? Sony's doing better than I thought actually...(snip)...Glad everyone can do math around here when the Playstation Sux0rz articles come up.

Yet from the other side of this issue, one might notice that the PS3 has only sold half as many units as the Wii, and the Wii is still flying off the shelves within minutes of arriving, whereas PS3s are just sitting there in many locations. Even factoring in the price difference (which is far less relevant for future game development effort than number of consoles out there), this still means that there is more demand in dollar value for the Wii. I don't know how the PS3 is going to compare to the 360, but by just about any metric that you look at it is losing out to the Wii.

Don't get me wrong, I do think that Sony can build a great system. The PS2 was a stunning success, and it rightly destroyed the competition in the last round. And I'm sure the PS3 is a marvelous piece of equipment. I don't really know, because I can't afford one at the moment. But as all the console companies should realize (Nintendo learned this the hard way), past industry dominance does not insulate you from being unseated in the future, and I think Sony was really banking on the fact that they could ride the PS2's success when they set their price point - a mistake largely caused by their desire to win the much more lucrative format war over HD discs. $600 is just too much for a toy, plain and simple, no matter how many bells, whistles, and PPUs it has.

Sony's PS3 spokesman John Lennon added...

[theurge14]

...that things are "kinda dead over here".

Effect of marketing..

[stratjakt]

Do you think the "wii would like to play" campaign has helped this a bunch?

Compare it to the PS3 commercials, where like a creepy baby explodes or ... i dunno, i dont know what the fuck I'm looking at. And then it says "its thinking". Maybe that was Dreamcast, they promoted it with nonsense too. I remember the commercial for Jet Grind Radio, and it was a bunch of screaming japanese people, I guess spoofing wacky japanese TV. You wouldn't know what the commercial was for, and the game itself kicked ass - all you needed was to show some ingame footage to sell it.

I see PS3's campaign and MSFT's skip-rope jump in the game campaign, and as a gamer, wonder "what the fuck are they tyring to sell me?"

Nintendo's sort of say "hey, check this out - it has no plans to dominate your whole life or change your lifestyle, or reinvent the way you watch tv - it's just a fun toy that anyone could have a blast with, and it's cheap too"

I guess I'm saying I see Sony and MSFT distancing themselves from selling a "gaming console". They want to pretend they sell obscure services and convergance and other crap people dont understand, or even want.

Re:Who let Gamestop talk?

[rhizome]

I really don't agree. In fact, I feel the Wii has the worst ratio of good to bad games out of the next-gen consoles.

Okay, this is just retarded and meaningless. You're using an online ratings site to say what you "feel," that everything besides Zelda sucks on the Wii. The only conclusion I can make is that you haven't played any of them at all, and perhaps you've never even touched a Wii. Wario Ware is an amazing piece of work that actually uses the controls nicely, SSX is great, and if you go to, say, the IGN Wii boards you'll find passionate attachments across the board for many of those games.

A criticism I'd allow is that a lot of the first wave games have been ports of existing games or engines with an updated control scheme to account for the lack of gamepad and all. People don't like SSX because the controls are too hard, other games are too short, and so on. There is definitely a bunch of whining about the learning curve on the controls and I think this is very healthy.

I think what we have here, both in the post I'm replying to and in this story overall is the fact that 90% of the gaming industry was taken by surprise by the Wii's popularity. Everybody thought graphics were paramount and the PS3 was going to blow the world away. So now we have a bunch of gaming touts who got caught out in their predictions and so now have to invent criticisms to re-establish their pundit primacy. The quickest way to predict the future reliably is that things are not very good right now: pessimism is the stock and trade of industry journalists. This isn't to excuse game studios, because most of them had to radically shift gears from the XBox360/PS3/HDTV gaming market to take advantage of the Wii's surprising popularity. So what we see is a lot of repurposed old titles released to fill the channel, then a slow trickle of new games that are specifically tailored to the unique traits of the Wii.

I think history is telling us that Nintendo hit a home run with the Wii, and all the stats nerds are sitting in the bleachers taking potshots at the visiting team for winning the game. XBox and Playstation are the stock in trade for many gamers, so it's predictable that they'd bite back when the cutesy Nintendo nerds get the advantage. Sour grapes in full effect.

We still have lines...

[Cyno01]

I work in retail, in the electronics dept, we get at least 10 calls a day and as many people stopping in asking about the wii. We get shipments in randomly and sporadically. We got 12 in on tuesday and sold the 4 we could in less than an hour. The other 8 we had to hold because our weekly flyer promised a minimum of 8 per store on sunday. So this week i've told at least 50 people that if they want one of those 8 Wiis to be at the store when we open at 7 on sunday. Its like that every 3 weeks or so when the Wii gets advertised, people lining up at 5 in the morning. Meanwhile we have more than a dozen PS3s upstairs that we cant sell. We had less, but then people returned some...

I'm personally very happy with my Wii, got it at launch, only had to wait in line about 10 hours, and that was lots of fun, everybody had DS' and booze. Only my second console and the first one i've bought new. Im somewhat dissapointed with the lineup so far, but im looking forward to super paper mario and mario party 8 (as well as SSBB and Metroid), and im sure it will get better. I have spent quite a bit on virtual console game, and those are keeping me occupied. Since i never owned any of those systems, its not a bad deal for me.

I am considering maybe getting a 360 though, mostly because i know as much fun as the wii is, we're not gonna see games like Gears of War, Lost Planet, Crackdown, GRAW2, etc on it (not to mention Fable 2, KotOR 3 etc). I was considering getting a PS2 for a while, but i hate sony with a passion and Guitar Hero is coming out for 360 next week, so theres not much need now. The only thing off the top of my head that i still want to play on PS2 is katamari.

6 million is dogging it?

[kinglink]

They have sold 6 million units. All my local stores have regular shipments. I haven't seen any still because they just go too fast. That's not exactly bad numbers, it's just higher then expected demand.

In 5 monthes they sold more than half what the 360 sold in a year with constant shipments. I'm sure Nintendo is just holding back production, because they don't need the money right?

Let's just look at this, Nintendo is going to ship as many units as they can, they arn't holding it back. They might not be forcing their employees to work overtime just to ship an extra 10 percent of units. 6 million units is an amazing number and they still constantly sell out.

Might they hold back a couple in the last couple weeks? Maybe. But I don't think they have been since January it's gotten easier to find and there's not as many news stories about it, but I still don't see them laying around for days, weeks, monthes at a time.

Let's look at the other side. Sony. Sony had a massive launch people waited for days out in the cold and almost killed themselves to get a PS3. They shipped less than they promised (and around half what the wii shipped the first day) and saturated the market. At this point it's completely saturated PS3s are laying around on the shelves and Sony is claiming "victory" any way they can. The European Ps3 launches were ok in that everyone got a Ps3, but how could you not sell out? The playstation 3 is shipping out 6 million units this month. The Early reports are a third of them have been sold. It'll probably hit a half because of a European launch. And we get weekly reports of "why" they arn't selling so fast because they are successful at getting that many units out there.

The 360 also had some early shipment problems. Systems did appear on the shelves in the next couple months but even then neither system had half the numbers the Wii has.

I think Gamestop is feeling the fact that people WANT the wii, and Nintendo has only alloted them so many. Best buy and Walmart can get 20+ systems in a single shipment, Gamestop is lucky to hit double digits per store in most shipments. This happened at launch and still happens now. Gamestop just doesn't get as many units (per store) as the other chains, even though their focus is only on game products, that would piss me off too, so methinks this is a case of sour grapes and the delicious Wiine. (sorry, but at least I didn't go with "whine".)