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Nintendo May Pull Wii Ads To Avoid Hype
Due to the lack of product on store shelves and overwhelming demand, Nintendo is considering plans to pull marketing campaigns for the Wii during the holiday season. "The company recently dismissed suggestions that it intentionally engineered shortages to build up hype for the Wii. It claims to be producing 1.8 million of the consoles each month at full capacity. 'The issue of supply management has to be questioned, not least because 2008 is going to be the crunch year for the Wii. It's then that we'll discover whether it's a fad or something with legs,' Screen Digest analyst Piers Harding-Rolls told The Times."
Hopefully next year we'll find out if the iPod is just a fad or if it has legs too. How long does something have to be popular to officially not be called a fad?
I heard Nintendo was going to shut down production altogether just to save themselves from the massive demand and large amounts of cash that would be thrown at them.
Talk about fates worse than death!
Oh wii-ly?
This guy's the limit!
Why waste advertising money on something that is flying off the shelves? Once once sales start slowing down they can redouble their advertising efforts and get the "hype" machine moving again.
At night I drink myself to sleep and pretend I don't care that you're not here with me
I don't know if it's so much about avoiding hype as it's good business sense. The primary purpose of advertising is to generate demand for your product. If the demand exceeds the supply, then why pay for more demand?
I often wonder what would happen if Coca Cola would say "We're not going to advertise for one month". Would people really stop drinking Coke? How much money would they save?
1.8 milions a wii a month is a lot. It's 41 wii per minute, but still not enough for everyone.
An other interesting number from TFA:
"The Wii has outsold Sony's PlayStation 3 and Microsoft's Xbox 360 each by more than two-to-one this year."
I didn't found something funny to put here.
Last I saw The Register was running an article that said Nintendo had already pulled the ads.
The Register Article
Curiosity was framed, Ignorance killed the cat.
eurogamer reports from gamesindustry who reports from The Times.
http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article3018315.ece
Since Nintendo is pulling its hardware ads, why not put some proper marketing on its games? Seriously; the only Nintendo game I've even seen a magazine ad for in over a year was Fire Emblem, and I only saw that one in comic books. If Nintendo wants to reach casual gamers, then it needs to start promoting its ads in places casual gamers go, and hardcore-gaming venues just don't fit that description. Word of mouth alone won't make a million seller.
Does anyone else feel that this press release is an advertisement in disguise, in and of itself? "Our product is so popular that we're actually going to cut back advertising because we probably don't have enough and if you aren't one of the people contributing to the problem, then you are clearly the minority and are not 'with it.' Please desire a Wii for Christmas, now that we have informed you of how popular they are in an advertisement masquerading as a press release that claims we are cutting back advertisements for the product."
EBay Wii resellers are just an inevitable part of the economics of capitalism. If this was a commodity, the price would rise instantly as demand started to approach supply. Here, Demand far exceeds supply, so the MSRP is an artificial price ceiling. If I was in the market for a Wii and didn't have the time to search for one, I would appreciate that there was service charge I could opt to pay for someone else to find one for me. In other words, why the hostility towards the trade?
If I was in the market for a Wii and didn't have the time to search for one, I would appreciate that there was service charge I could opt to pay for someone else to find one for me. In other words, why the hostility towards the trade?
Do you know how scalpers work? They buy tickets, all the tickets to an event. "Fair price" in the free market is the price that maximizes profit with infinite supply. That is, if there were an infinite number of tickets to see the Super Bowl, what price for all tickets would maximize profits? That's the fair market price for an item (not strictly true in this example, however, because every seat has a different value for proximity to the action and such, but we'll overlook that). However, monopolies have different economics. You maximize profit, regardless of the number of units sold. That means that scalpers buy all the tickets, then set the price so that they will maximize profit for the limited total number of tickets. If the Super Bowl has 10 people that would pay $10,000,000 to watch it and past the 1000th person, no one would pay more than $10,000 per ticket, then it would make more sense for scalpers to sell tickets for $10,000,000 each, sell 10, and take a loss on the remaining tickets they bought. Still, charging $10,000 per ticket is better than selling them all at $100. So what happens is that the "service charge" you are talking about is a monopolist surcharge.
The same economics work with anything that has limited supply and the price isn't adjusting to the market. What the free market demands should have happened is that Nintendo should have released it at $300, rather than $250 to get demand down to where supply is. But they set the price low and the demand was high, resulting in sellouts. But one thing that's making the sellouts worse is the unknown inventory of unused Wii. When the scalper buys one, it isn't used. That is one that isn't on the market, reducing supply. The more scalpers there are, the more this becomes an issue. At some point, the number of scalpers will exceed the demand. As such, people will be paying scalper prices for the sole reason that scalpers bought items they didn't intend to use, reducing supply and creating an artificial shortage. That time will come soon, maybe as soon as the Christmas returns hit the stores in early Jan, perhaps not until a little later next year. But there will be a point where the cause of the fee you mention is the same people that are charging it. Regardless of all else you could say about that, "not nice" would apply. That is why people don't like it.
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Do you really think a significant part of the 1,000,000 units/month (30,000/day) are being resold through the secondary market?
A quick glance has 90,000 on ebay in the last 3 weeks (we'll call it 125,000/month) 900 are listed on amazon, and I don't know where else to check.
These 20% or so that are in the reseller market are getting placed, just later than if they were sold in stores, so shouldn't be keeping supply so much more constricted than naturally.
There is a chance that people are sitting on thousands of Wii, but I somehow doubt it. The scalpers have it easy because they can.
1) buy up the good seats, there are not that many
2) buy a small percentage and let other people buy up the bulk at retail.
The second is what lets the Wii resellers succeed, they are not creating the demand, they are riding that wave.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
It's totally easy to keep a "semi-constant" stock when no one wants your product. Right now, Nintendo has sold more Wii consoles than Microsoft has sold 360 consoles. And the 360 had been in stores for about a year before the Wii came out. So divide the number of Wii consoles sold in half (current estimates are saying 13 million) and let's talk about hypothetical.
If only 6.5 million Wii consoles had sold in the same time frame (still more than the PS3) there would be no shortage right now. Or ask this question, if demand for the 360 was the same as for the Wii, would we see 360 consoles on the shelves? (Just double the number sold currently (around 12 million)) Do you think there are 12 million more 360 consoles in stores right now?
Hell, Sony wishes they had Nintendo's problems right about now (not enough stock for overwhelming demand, making cash hand over fist, maintaining top-notch development studios).
So, in most respects there are no shortage of Wii consoles being produced, Nintendo just has the problem of almost everyone wanting one.
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