Slashdot Mirror
Where are Wii?
WirePosted writes "Santa is in trouble, it looks like supplying the Christmas need for a Nintendo Wii game console is in jeopardy as stocks wither under constant and heavy demand. Conspiracy believers suggest this is an orchestrated move on behalf of Nintendo." Since this happens to be what I want for Christmas, I hope they work it out, or my loving wife has already found one.
Two things jump out at me in this article. The first is that this once again proves that Gartner is worse than useless. The second is that they left out one element. Take a look at Amazon or over at ebay. There are literaly thousands of Wiis that have been purchased by people for no other reason than turning around and selling them above retail. This has been going on for quite a while, though the prices have really spiked in recent weeks. I think they were averaging around $350 on Amazon for quite a while, as opposed to the over $500 now. And the number for sale there has greatly increased. I think some people may end up still holding them after the holidays though, because part of the appeal of the wii is the price. If I'm going to drop $600 on a console - I might as well get a 360 with some games or a PS3 that can play all those PS2 games out there.
It's hard to believe that's how Micronians are made. Why don't we see it right now by having you both kiss one another?
There are lots of Wiis in stock in shops in Sweden. Where do you want them sent?
... )
(Seriously, I have no idea what Nintendo is up to, but claiming there's a severe shortage of PAL Wiis in the UK with lots of PAL Wiis available in other countries - only the plug on the AC adapter differs - doesn't sound right. Add a firmware flash and then the same hardware would become NTSC
it's in my head
Ii'm iin Saiint Louiis. Slashdot iis iin Dexter, Miichiigan. And the capiital of the Uniited States iis iin Washiington, DC.
The Rapture is NOT an exit strategy.
Same shit every Christmas just with a different name. Kids want the same 'cool' toy, so mothers (and some times fathers, but usually mothers) turn up at Toys 'r' US at 3am every day waiting for the next shipment then end up in near fist fights over it. It's been going on for as many years as I can remember, the only difference is the cost of the wii is much greater than the cost of a Furby or Buzz Lightyear was.
But hey, I already have a Wii and want a 360 this year, so I'm quite happy to watch the same story over again, except this time it's on slashdot instead of the local news. The thing about the Wii is that its the Must Have Item 2 years in a Row
Urban legends tell us that console manufacturers make no profit on the console but recoup the losses on games. Of course, various articles over the years have debunked that belief, and the general message seems to be that Nintendo was making a healthy profit on the Wii LAST year when they started selling it. With the reduction in cost on the various components, it can only be better this time around.
The simple fact is that Nintendo has underestimated demand YET ANOTHER time. It's not as though they were the only ones who made this mistake - tons of third party companies jumped in around July and August this year to announce that they'd be releasing titles for the Wii now (presumably they hadn't been onboard earlier because they expected it to be a failure). Analysts have been continuously stating that the Wii would "lose steam" when people got over the novelty. It never happened. Now demand is through the roof again, and it's a tough problem. Getting the output just right for the holiday season is tricky - too few and you're left with the current situation, but too many and you'll have factories sitting idle after the fact. Couple all of that with the problem other posters have mentioned, ebay and Amazon "scalping" of Wiis, and you've got more difficult problem than you might first think.
Bottom line: Nintendo makes good money on every Wii sold. Every Wii sold at holiday season also likely represents at least one more wiimote+nunchuk combo sale, which nets them even more cash, not to mention the additional games. But obviously Nintendo would rather turn down millions in profit so that they can keep the system "elite" or some such business. This is starting to sound like the old underwear gnomes business model meme.
Think of this way, if it helps: RockBand is also selling out like crazy. EA and Harmonix have publicly stated that they can't make enough to satisfy demand. They make a profit on the package. Do you think they're not selling more as part of some brilliant plan to make it even cooler?
Price in the US: USD 249
Price in Europe: EUR 249
The profit margin is much higher in Europe (even after accounting for VAT). It makes sense to give priority to the countries where the profit margin is highest.
Don't you mean Saiint Lou-wii?
...and that's the way the cookie crumbles.
"Conspiracy believers suggest this is an orchestrated move on behalf of Nintendo"
Then they would be idiots, do people think that when someone sells one on ebay for £320 (as I have seen happen, that's more than the PS3) they send off a nice cheque to nintendo just to say "thanks"? no. Nintendo loses money on each of these (since they only get the original sale and after the inflated price people are less likely to buy a lot of games). Nintendo really wants to meet demand, it's stupid to suggest otherwise.
*''I can't believe it's not a hyperlink.''
Why would Nintendo want to sell more units than it takes to meet their projected sales for the quarter?
I took a business class in which Nintendo was used as real world example for how they controlled prices for a release of Zelda. If I remember correctly it went something like this:
Nintendo tells retailers "we're going to produce X amount by Christmas, give us your orders." Wal-Mart tells them, "we're big and will sell a lot of games, give us a huge number of them at a ridiculously low price. Otherwise, we won't carry it and you won't sell enough of them to make any money."
Nintendo hates this, of course. So, they cut back sharply on production of the game. Closer to Christmas they tell the retailers, "oops, we only have Y amount. It's not enough for what we already know everybody wants. Give us your desired quantities with your _best_ price in Z days."
Walmart just lost their leverage. Nintendo sells fewer cartridges but at a significantly better price than Walmart was offering. Not as good as they originally wanted but better than Walmart's offer.
Something similar is probably happening here. The Wii could easily move in huge volume but the retailers would want a lower price. As long as:
you'll have a hard time finding a Wii.