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.

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.

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: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."

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: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.

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".)