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Wii Shortages Costing Nintendo 'A Billion' In Sales
A New York Times article from this past Friday highlights the 'problem' that Nintendo is facing: more people want to give them money than they can handle. Analysts quoted in the story discussing Nintendo's unique Wii shortage problem indicate that the company could be selling twice the 1.8 million consoles a month it ships. All told, these same individuals believe the company could be leaving as much as $1 billion on the table this holiday season. "'We don't feel like we've made any mistakes,' said George Harrison, senior vice president for marketing at Nintendo of America. He said there was a shortage because the company must plan its production schedule five months ahead, and projecting future demand is difficult. He added that there had been a worldwide shortage of disk drives that had hurt Nintendo as well as makers of many other devices. 'It's a good problem to have,' Mr. Harrison said of the demand, but he acknowledged that there could be a downside. 'We do worry about not satisfying consumers and that they will drift to a competitor's system.'"
When people try to justify downloading music, they say it's okay because they wouldn't have bought the album in the first place, which means that no money was lost in the process.
Wouldn't the same kind of logic hold here? How can Nintendo lose money on nonexistent consoles if they're already at full production?
Goo goo g'joob.
I just don't understand how they could not have for seen this shortage. I mean last year the same thing happened and they said then they would be ready for this year. Yet here we are. I have friends, family and co-workers asking me where they can get thier hands on a Wii. It really makes me wonder about the rumors of intentional shorting. From a business point it would make no sense to short your sales. From a marketing point however it's been brilliant. Wii is all the rage and is likely so popular BECAUSE it's hard to get. Nothing lights a fire under middle American purchasing power like that hard to get must have Christmas gift.
The question I have is, ok it's $1 billion this holiday season but what about the after affects of the holiday? How many people who are dying to get the Wii (but can't) will still go and buy it in Jan., Feb., Mar.? My guess? A lot. Considering they've been doing it since Nov. 2006.
It reminds of the pirated music idea. A person who pirates music(or movies) isn't necessarly going to be buying said music(or movies). Thus, one cannot say that pirating is a 1:1 effect on sales. Likewise, you cannot say that people who cannot buy a Wii as a gift for the holidays will not buy one after the holidays. Theoretically, if the Big N satisfied demand in December, they would then loose all those Q1 2008 sales. So, what's the point? The real question is, if those who want a Wii, but bought a 360/PS3, will still buy a Wii in the future?
Cheers,
Fozzy
"The past was erased, the erasure was forgotten, the lie became truth." ~1984 George Orwell
I'm spending it on mercury, then dumping it in the local lake. On the way home, I run over squirrels and cute bunnies.
Includes such games as Real World TENNIS (indoor and outdoor versions available)
I'm not sure where you are, but up here in the Northern Hemisphere it's winter when Christmas time comes. Even as far south as Texas playing outdoor sports is not something most people, even athletic, think is a good idea.
As far as indoor, while it may be a helpful, I don't know many kids who are going to think "fitness club membership" is an awesome gift.
bowling alley... FRESH AIR.
You know in my word association, "fresh air" makes me think "bowling alley" just before I think "corner dive bar".
The enemies of Democracy are
I think those all fall under one or more branches of Bistromathematics.
GO OUTSIDE AND PLAY! I hear ya, man. I wish I could impose my views on everybody in the world, too.
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
Step 1: Read Peter Senge's Fifth discipline
... they may even place orders at each store... when person X gets a wii, they cancel all other orders. So "10" orders really was 1 order.
Step 2: Understand that the Wii is a perfect example of the Beer distribution game
Step 3: Realize that demand is at least ONE ORDER of magnitude smaller than reported.
Case in point: Person X goes to store 1 and asks for a wii, then proceeds to search through store(s) 1-10
If Nintendo attempts to fill the "Billion" in orders, they will greatly overshoot and end up with a flooded market that can't get rid of the damn things. Slow and steady wins this race, a few million in sales lost over the entire potential beats the crap out of overshooting with 100 million dollars worth of hardware sitting on shelves, or ending up in landfills
meh
I have the solution to solving the holiday product crunch: spread the holidays out over the calendar. In the USA, divide the country up into 12 regions of about the same population and economics. Then assign each region a different month to have the gift giving holidays. Most people don't celebrate Christmas religiously, anymore, so this shouldn't be much of a problem.
The above does still leave a big crunch at stores and malls within a region. So maybe it's better to divide things up on a micro-scale instead of a macro-scale. So, how about celebrating the gift giving holiday based on (zipcode % 12), where you celebrate gift giving based on your zip code modulo 12 to choose the month.
This still means a big crunch for families and neighbors in the same zip code. So I have a better idea. Let's use the date of birth to determine when to celebrate the gift giving holiday, based on who the gift is for. And instead of having it all on one day of the month, let's spread it out further and use the actual date in the date of birth for everyone's own personalized gift giving holiday.
Ooops. I didn't take into account February 29. Never mind.
now we need to go OSS in diesel cars
And this is why your entire argument falls flat. You're a gamer, and you assume that everyone else looking for a Wii views it the same way that you do. Hardcore gamers have already made up their mind about whether they want a Wii and bought one if they wanted it. Now, the vast majority of people looking to buy a Wii are either new gamers, or parents of new gamers. These are people who have no clue what "cross-platform gameplay" means and if they wanted to buy a PS2 then they would have done so long ago, since the PS2 has been a mature and available system for years.
The real driving force behind Wii is not that it is a "must-have-one-too" Christmas toy, but rather that the Wii is a social system. People play with their friends and/or family members' system, and decide that it is fun enough that they want one of their own. I may only have anecdotal evidence of the Wii's "viral" appeal, but I have seen it happen so many times I'm thinking about keeping a tally on the side of my Wii to record the number of friends and family who have gone and bought their own after playing with mine.
Sure, there will be some people who don't buy a Wii after Christmas due to budget constraints, but the vast majority will simply wait and sustain the demand well into next year. However, they won't spend that waiting time "evaluating other options," because for these customers, there is no other option.
There was an article ages ago about this, and the Nintendo guy said something I thought was very telling about their attitude to customers. He said they were ramping up production as far as they could, but to stretch the supply chains any further would mean dealing with component manufacturers and suppliers they neither knew nor trusted. Yes, the result would be a larger supply of Wiis, but a much higher percentage of defective machines; either as soon as the customer got it home, or soon after purchase. They didn't want that to be associated with their brand, and said they'd rather manufacture less consoles, and have them work properly, and hope people would be patient and understand.
Compare and contrast Microsoft's attitude of denying the problem for ages, then setting aside billions to handle defective machines under extended warranty. My Wii's seen daily use since launch date - all I've ever had to do was change batteries in the Wiimote. If it does break down, I'm stuffed as far as getting another one is concerned, at least for a few more weeks.