The global Christmas Wii shortage may have saved individual gamers a few quid, but one analyst thinks it’s cost Nintendo up to $1.3bn (£637m/€888m). MDB Capital Group’s senior analyst, James Lin, told the New York Times that the volume of unsatisfied demand is "staggering" and that “Nintendo is leaving $1.3bn on the table” by …
On your marks, get set........
(it's a console realted thread, my money says it devolves into "You shoulda bought ps3 noob!" or "i got a 360 and it roxxors!" type thread in about 5 posts)
"it’s cost Nintendo up to $1.3bn"
But it's saved them most of that because they haven't had to make them! You'd think a 'senior analyst' would know the difference between turnover and profit. At least Nintendo actually makes a profit on the things, unlike Sony and MS...
I'm in the wrong job
How much do these people get paid?
So he basically says "they could make more money if they sold more". Genius !
Can we have a stating the bleedin obvious icon...
Steve - you are wrong
It only took one post to get into the slanging match... Is that a record?
Nintendo makes profit on each console, so he’s probably referring to that missed profit, rather than the sales revenue.
Mark - eh?
Made it a best seller, by not selling many? How does that work?
By that logic, my novel is the best-selling book ever, because I've never sold a single copy!
amanfromMars icon, because he makes more sense
"everything the Wii is doing today, the PS2 was doing 4 years ago with the Eye Toy..."
Yes, but without any of the innovation, gameplay quality or style of Nintendo. Other than that, exactly the same.
Re: On your marks, get set........
5 posts? It only took 2! Why can't people learn that all the consoles have advantages and disadvantages...
PCs are customisable, have mouse and keyboard for precision, and the biggest library of games, but it can be expensive to keep up.
The Wii is cheap. amazing at making games more interactive and making gaming more mainstream, but it is outdated hardware
The 360 has brilliant online features and a huge library of good games, but is very unreliable
The PS3 is probably the best paperweight I've ever seen, although it is a bit overpriced for the role ;)
Re:Don't be silly...
***"The ONLY reason the Wii is selling, is due to it's "hard to get status"."***
Interesting logic, there.
***"Nintendo have pulled the wool over consumers eyes, and made their crap, very last generation console, a best seller, just be not selling many of them."***
So poor sales = best seller, then?
***"I mean come on, everything the Wii is doing today, the PS2 was doing 4 years ago with the Eye Toy..."***
Err, yeah, right. Anything you say.......
***"Nintendo makes profit on each console, so he’s probably referring to that missed profit, rather than the sales revenue."***
Hey! that should please Sony. They make a loss on every console, so every sale lost to Nintendo actually *saves* them money!!
The standard counter-arguments
This is old news, surely, but:
a) if Nintendo sell all they make then they have a very fat-free production line.
b) if Nintendo were to ramp up production now (something that requires significant costs to do...investment in hardware production etc) then they might temporarily raise the number of consoles sold, but when demand dies down they'll be left with a huge means of production and far less demand. If demand will stay high then why not make the consoles as cheaply as possible?
c) Nintendo are (intentionally or not) creating a Cadbury's Cream Egg effect - restricted supply increases demand.
d) Nintendo have sold more Wiis than MS have sold 360s, and MS had a year's head start. I'd say that means that Nintendo are producing loads of Wiis, it's just that demand is /even greater/ than that.
e) if Nintendo were to follow the advice of this random business analyst, they'd be guilty of just as much reactive strategy as all the other businesses who listen to similar bleatings.
Proof if it were needed that there ain't no crystals balls being used by the analysts. Predicting future trends is very hard. PC World got it wrong by stocking up on something they couldn't shift. Nintendo got it wrong the other way.
It could have been worse for them - they could have rolled out a few million units more than they could shift. At least this is a theoretical loss, if you can even call it a loss at all. It's like me claiming I lost £10mil 'cause I didn't put the winning lottery numbers on last week. Gotta love hindsight.
Now if someone could point me to the analyst reports from 12 months ago saying Nintendo should increase Wii production to a level that would meet current demand I will be impressed.
Playing a blinder..
Nintendo are playing a blinder here, they are metting quite a bit of the demand, but by having a "shortage" they are getting pages and pages and pages of free press coverage - editorial is worth its weight in gold, it has far more impact on customers buying paterns compred to adverts, plus rarity = desire to own one. They've pulled a blinder.
Forgetting the costs of producing more units, surely?
Remember that Nintendo learnt a rather bitter lesson with the Gamecube, when they overproduced massively, and actually had to shut down their fabs, causing them to lose money heavily in that period.
Nintendo already ARE at maximum production, and in truth they are producing more consoles than the other two put together, its just that the demand far outstrips that production. Ramping up any further would require new fabs, and its just not guaranteed that the demand will stay this high, so there is no way in hell Nintendo could justify that kind of cost. Besides from their point of view, they are already selling every unit they make, so whats the problem here.
Madly enough there are Wiis in shops even now, but the shortages are now being caused by greedy retailers thinking they can put a 100% markup on each unit, and people will still pay for it. So yeah, usual analyst bs here. Wish I could spout crap like that and get paid for it.
Glut on ebay
well, at 13.44 today on ebay there are 10,953 wii's and that one went for £175, not really a bad price considering a few weeks ago on ebay they were going for nearly £300, the laws of supply and demand are kicking in on ebay at least and I suspect a lot of store staff who thought they would grab a tidy profit on ebay from all the hype are about to get their fingers burnt :)
Heart icon cos you just gotta lurve it
Not really sold out...
I don't think the Wii would have been completely sold out if they weren't snapped up in big quantities by ebay sellers. Don't think there is anything Nintendo can do about that
Shortage - what shortage
On the continent there is no shortage of Wiis. As the previous AC says "Nintendo are playing a blinder here" by manufacturing a situation they are getting loads of free publicity. They are probably selling more Wii's that they would without the so called shortage. However they need to have analyst reports like this or the EU would sue their asses off for restricting free trade. They have clearly lent on many major contintental suppliers to get them not to ship supply goods to the UK. The EU have been asked to investigate this. So they need to make it clear that they are suffering from this "shortage". Hence the report.
They already increased production.
Nintendo announced in spring that they would increase the oproduction of Wii by 2 or 3 milions units for the christmas 2007 time compared to their original forecast.
However they explained that it wouldn't be enough to satisfy demand but that it was technicaly difficult for them to increase production more.
I suppose that a complex product as the Wii as a complex supply chain and that some of the components (processor, ram, GPU, chipset, drive or whatever) are bottlenecking production, or nintendo can't secure production units etc...
@ Dazed and Confused
"On the continent there is no shortage of Wiis."
Not actually 100% true - they are pretty much sold out in Holland, and have been for a few weeks.
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