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Locked: Why the Wii Won't sell 80m+

Forums - Sales Discussion - Why the Wii Won't sell 80m+

Okay. First off, before I say anything, I am NOT attacking the Wii sales, or calling it a fad, or saying it will suddenly drop off the radar, or any other sort of fanboy thing. Don't crucify me....Entirely. However, it seems that a decent number of people believe the Wii will sell above everything else (easily possible considering its current sales), and some sugguest it'll do in the 75m+ range. Now, we can all argue and discuss this, each with rather valid points, as the console wars are only 4 months in, and we still have around 56+ months to go. However, I want to submit to you this which I feel is near-fact: The Wii cannot reach PS1/PS2 levels. I believe it is nearly a mathmatical impossibility. I am not stating this from being pro-PS3 or pro-360. I have made near the same predictions since April last year, and I haven't really changed anything thus far. I believe the Wii will sell great, and will ressurrect Nintendo to become a console giant once again (although I do admit I hate them due to their business tactics of the 80s, their betrayl of my favorite mid-90s RPG makers, and rehashing their top 3 franchises to make me nausiated). If I am wrong, please prove me wrong, but here we go: We can argue if the Wii is a fad or not. IMO, it's not, and obviously it's trending will allow it to continue to sell well. However, from Nintendo's trending of poor manufacturing, I feel it's unlikely that Nintedo will allow the Wii to become an uber-gaming console and reach PS2 or PS1-like heights. Consider the top 3 systems of all time: PS2 - 125,000,000+ Units LTD (and growing) - It's been out for a behemoth 7 years, and still selling well in most every area. It's selling around 60,000 a month in Japan, 250,000 a month in the US (or so), and probably around 200,000 in "other" territories - it still leads the 360 and Wii in most countries in Europe and Austrailia. No system has been like it. Most likely, it will sell another 20m units or even get to 150m units. PS1 - 110,000,000+ Units - The PS1 set the precedent for uber-sales for consoles. Oddly enough, the PS1 started out very slow in the US until it's 3rd year when FFVII came out, and started the wildfire in the US that made it sell 35m+ consoles. It recieved a PSone revision in 2000, and continued to sell well into 2002/3. NES - 69,000,000+ Units - Obviously the granddaddy of uber-selling systems. Although it didn't get to the heights of the PS1/2, it was the lone reason (atleast as far as my studies show) that the gaming/console market in the US revived itself after 2 years of nothingness in the crash of '83. The NES did its sales very well, considering European markets and "other" markets hadn't been established strongly, and did it merely by selling well in the US and Japan. It had a lifespan of 7-ish years from 1983 to 1990 when the SNES came out and overtook the NES's lifespan. Still one of my favorite systems. Now, why did I mention these systems? There is a critical component of a system selling well that I believe the Wii does not have: Time. Yes, we all make fun of the graphical power of the Wii, and many argue "it'll sell well because it's about fun and controller innovations in gameplay" which is certainly true. However: Think of a number of how many years the Wii will sell for, and sell out for. 3 years? 4 years? 6 years? 10 years? I am talking about the current Wii we have, not a Wii+ or a Wii HD or any other sort of beefed up Wii to counter the PS3/360's HD-capability. This, I believe, is the achilles heel in everyone's Wii predictions. Nintendo's current production of the Wii stands at around 1.0 million units a month, which it sells through just about every system. Now, I'm not going to tell anyone they are wrong in their belief the Wii will sell out for the next 3+ years. If it does, great. However, lets use mathmatics to determine the possible sales of the Wii: At 6m consoles sold thus far worldwide, and Ninteno producing 1m consoles from now till it's death, we can get a maximum window of how well the Wii can sale: So lets take the magic number anyone can give of the Wii's continued sellthrough rate. The Wii sells for another 56 months (5 years total life), and sells every one of the million units: The Wii ends up with just around 62m units sold. Very awesome number(s), as it'd be the #4 selling system of all-time. 62m is still a far cry from 80+m that some predict. I believe John Lucas stated he thought the Wii would be at 80-100m by it's end. But what about increased production capacities? Obviously if the Wii sells out every day, and Nintendo can't make enough of them, that they'd increase their factory capacity. Very true. Thus far, it's been stated Nintendo is increasing the capacity of their factories to around 1.1 to 1.2m units a month. A very good increase, as it allows 10-20% more in the supply chain. Now, at 1.2m units (the high end of what the factories are producing), we get 73.2m units sold, again, if EVERY Wii made in the next 5 years sold out. Could the Wii actually sell every unit made between now and 2011? Possibly. However, it'd take alot of faith from alot of people to believe such numbers: Even Nintendo doesn't think the Wii will sell that much. So again, even with it selling at the high end of what Nintendo is doing, its still under 80m. Okay, so lets say Nintendo then increases production by 200,000 units per month each year for the next 2 years, peaks in 2009 and stays there for the next 2 years which is about the max Nintendo could do: 14.4m Units for the next 12 months, April through March of 2008 16.8m Units for the next 12 months, April through March of 2009 19.2m Units for the next 12 months, April through March of 2010 32.0m Units for the next 20 months, April through November 2011 + The 6m units, we get just above the golden 80m mark, 82.4m units. Now, I ask you, how feasable is this scenario? For some of you, it might seem possible that Nintendo can magically increase it's factory capacity to some golden uber-number, but they cannot. The infrastructure needed to get more factories to make products takes a long time to do. The Nintendo DS factories are currently running at around 2.0m units a month - the DS is a far less complex piece of machinery, and the DS has been selling out worldwide (or close to it) for 2+ Years now. Now, of course I'm not calculating for extra Wii sellthrough after the next Wii or whatever would be made, even 5 years afterwards: Consider this: No Nintendo product, be it SNES, N64, GBA, GBC, or GC has ever sold remotely well after its predicessor came out (unlike the PS1/2). The GameCube is at 300 consoles a Week in Japan, just like the GBA. The N64 sold around 15k units in the US after the GC launched, and the GC is just at 25k a month only 4 months after the Wii launched. Therefore, I find it impossible for the Wii to have a decent life after the Wii2 launches. Now, those are my arguments against the Wii reaching some inane stratosphere of gaming nirvana that the PS1 and PS2 got to: I just don't see the Wii selling out for 5 years, then having another 1-2 years of near-sellthrough. Remember, Sony had YEARS to increase capacity for their factories for the PS2 due to PS1s incredible sales. The secret to any system that has sold very well (50m+) is the fact they lasted on market for atleast 6 years. The SNES didn't even reach 50m, despite it being wildly popular against good competition (Genesis). Why? Nintendo axed it once the N64 came out. MS did the same thing with the Xbox, and we see how that faired after the cut in support (the Xbox sold out the remaining units in about 3 months) I'll leave you with this easy question: What year in the console(s) life, did the PS2 and PS1 sell the MOST units in? What December did the PS1 sell 3 million units? (more than the 360, Wii and PS3 sold combined in Dec 2006) How old was the PS1 when it didn't sell over 1m units in December? How old will the PS2 be before it sells below 1m units in the US? Disclaimer: I do believe the Wii will sell greatly this generation, as I said at the beginning. Heck, I believe it'll easily outsell the 360 and PS3 in a very similar timeframe over the next 3 years. I believe the Wii family (including a second generation Wii) will become the biggest family of systems in history next to the Playstation 1/2 brand and the Game Boy family. I just like analysis, so I did the numbers and these are the ones I got. I could easily be wrong, as my numbers are based on a 5 year Wii lifespan. For some unknown reason, the Wii could life for 7 years and end up being a PS2. However, I do see, like many many others, that Nintendo doesn't even plan for this, thus the weak hardware in the Wii. Please feel free to flame away, but do it respectfully :) EDIT: Important Chart! This chart has no names for the various lines for a reason: Guess which system is which. Also, better yet, guess what YEARS this chart is for. This chart has the PS1, PS2, Xbox and N64 on it. This chart isn't for the launch year or year(s). This is some other timeframe in the US/NA. Also, if you can't see it, the top system (the green one) sold a little over 20,000,000 units in North America/Americas in just over 3 years (37 months). Again, it might be very obvious about which one is which, but I'm making a point.



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Wow great post, nothing else to say yet, some small corrections first then we can sitt down and enjoy this thread with popcorn and some alkohol of your favorite kind First DS factories is at 2.5 million a month Second Wii is above 1 million soon. I think Nintendo anounced that they would increase their output above one million in april. After that I agree with the most things written, Nintendo needs to get their production in place if the should sell more than 75+ millions. The only thing I know about that could indicates that the production capacity might increase soon is this articel were it is stated that Nintendo is talking with four new manufactors to solve the issue of supply. http://www.next-gen.biz/index.php?option=com_content&task=view&id=5056&Itemid=2 Of course I don't know how much they are talking about here, but I think that by 2009 Wii needs to hit 2.5 million a month to reach 75+ million totally. If they can do that it wont pe impossible to reach the level talked about. The industry capacity isn't that hard to push up as long as there is room in suppliers factories and that components can be deliverd. The electronic can be manufactored in non specialed factories, other pats such as the plastic body need most possible more capacity to be build. The number one problem can be custom chips such as the CPU or GPU that can be hard to increase capacity on.



 

 

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I understand that Nintendo and other sources claim the NDS is at 2.5m units a month for shipping, but I believe that information is VERY false. Consider this: The NDS sold 500,000 units (estimated) in the US, and around 550,000 in NA/America. The NDS sold around a similar number (125k/week) in Japan Also, the NDS is selling most likely around 400k a month in Europe/other. That puts actual sellthrough @ 1.4m units a month. The NDS is near (or actually) sold-out everywhere or almost everywhere in Japan, and I feel that most likely the NDS is near that level elsewhere. By those sales numbers which are actual (atleast for NA and Japan), Nintendo is shipping 600k to 1m units that aren't selling. IMO, at this stage, thats impossibe. The DS is doing beastly-like numbers, therefore I feel the 2.5m unit is far over-exaggerating their claims. Please prove me wrong, but the numbers just don't add up. This is why I believe Nintendo can't actually increase their Wii capacity as quickly as some believe possible. Again, at Nintendo doing 1.0m units right now, that'd put them at 62m units LTD at the 5 year mark, assuming every shipped unit sold. Obviously I calculated them doing 1.6m units a month (a beastly number regardless) by 2009, and staying there till November 2011, giving them the 82m unit number.



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I would say this is pretty sober look on the potential of Wii (as for this forum). For me it's still a bit too optimistic though. I don't believe in 5 years lifespan of this poor piece of hardware. In 2008 we will see another generation of PS3's games - I'm not talking only about graphics - it will be totally new quality. Wii will be as outdated as standard TV's - even now games for this platform looks poor, let's say they will implement HD support - so what? It will only underline how sterile graphics is. Flavor of newness will pass and nothing remain. Sooner than later. Wii will not surpass 50 m. End before 2010.



kber81 said: I would say this is pretty sober look on the potential of Wii (as for this forum). For me it's still a bit too optimistic though. I don't believe in 5 years lifespan of this poor piece of hardware. In 2008 we will see another generation of PS3's games - I'm not talking only about graphics - it will be totally new quality. Wii will be as outdated as standard TV's - even now games for this platform looks poor, let's say they will implement HD support - so what? It will only underline how sterile graphics is. Flavor of newness will pass and nothing remain. Sooner than later. Wii will not surpass 50 m. End before 2010.
ahh here somebody suddently just must draw up this when we had a nice chat about manufactoring...so let me say they same thing as I always say when this comes up: Wii Sport is a system seller, Wii sport has one of the uggliest graphics in the world today. Wii has already showed that they can have fun games on it. Now can we leave this and go back to the nice manufactory part?



 

 

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A few things to consider ... The top 5 best selling systems of all time are: Gameboy (Nintendo) 118,690,000 Playstation 2 (Sony) 111,250,000 Playstation (Sony) 102,490,000 Gameboy Advance (Nintendo) 76.77 Nintendo Entertainment System (Nintendo) 61.79 Your comment on Nintendo systems selling poorly after their replacement showed up is incorrect as the SNES and Gameboy sold 10 Million units after their follow up appeared, and the Gameboy advance has sold nearly 20 Million units since the launch of the Nintendo DS. Your 1 Million per month estimate negates the boost that all systems get at holiday periods, the Nintendo DS sold (roughly) 5 Million units in North America and Japan in November and December of 2006 and (as a rough guestimate) probably 7 to 8 Million units world wide in that time frame. Basically, if you're able to average 1.2 Million units a month outside of the holiday season and 8 Million units in the holiday season you'll sell 20 Million units in a year; if you can do that for 5 years you break 100 Million units. Now, the reason I wouldn't expect Nintendo to break 100,000 units is that you could claim that the only systems which have done that have artificially inflated numbers; there are a lot of duplicated Gameboy sales because of the Gameboy Pocket and Gameboy Color and the length of time the system was available, and the Playstation and PS2 have well known disc drive problems and were avaliable for a long time which increased their resales.



You make some good points. And as I have said many times, I simply refuse to predict what will happen I think there are so many variables this generation that I can't possibly figure anything out. But regardless I'll throw some points out there: your discussion focuses mainly on production. While Nintendo is not Sony, I imagine if Sony can make 125+ Million consoles where there is a demand, then Nintendo could too(or at least make within 40 million of that figure). Granted Sony is a much bigger company, but it is also a company that has to produce many other devices. Secondly, the demand, I think you have a strong point about the graphics, yet the graphics may be the reason Nintendo does score 80+ Million. How you ask? Well at 250 bucks at launch Nintendo could essientally in three years have a 150 dollar console, so cheap that many people even with ps3s and 360s will probably just get one anyway. Plus the biggest factor, and one that I believe reaches the heart of the ps1 and ps2 success is new markets. Sony was a big success, because they changed alot of peoples minds about video games. They sort of said, hey your twenty, your thirty, well it's still cool to play video games. It got alot of older people playing, revealing a mature side to gaming. That new market exploded for them. Now the market is bigger then ever, and Nintendo is set to expand it even further for people of any age or sex. I can't believe how many girls own the DS, and who are now interersted in the Wii, I also can't believe how many people who never liked games are who are older are into the Wii. For alot of these people they probably don't care about graphics so much, they want a cheap fun little system for stuff like Big Brain Acadamy, Wii Sports/health and stuff. There are so many marketing options for Nintendo here that it could score amazing sales figures.( I can see this being marketed as an all around practical machine, check the weather/news do a work out with Wii Health Post a message for your kids for later, and go to work.) With that said, I simply paint a possiblity. I think your points are valid, and I still think Nintendo needs another 18 months to prove it has any 80 million sales potential. But another big problem is that this generation has three very strong consoles, and two very strong handhelds, despite the growing market, the competition should not be underestimated. And I think this may very well be the first generation where no one scores above 60 million(with the exception of the DS).



mrstickball said: I understand that Nintendo and other sources claim the NDS is at 2.5m units a month for shipping, but I believe that information is VERY false. Consider this: The NDS sold 500,000 units (estimated) in the US, and around 550,000 in NA/America. The NDS sold around a similar number (125k/week) in Japan Also, the NDS is selling most likely around 400k a month in Europe/other. That puts actual sellthrough @ 1.4m units a month. The NDS is near (or actually) sold-out everywhere or almost everywhere in Japan, and I feel that most likely the NDS is near that level elsewhere. By those sales numbers which are actual (atleast for NA and Japan), Nintendo is shipping 600k to 1m units that aren't selling. IMO, at this stage, thats impossibe. The DS is doing beastly-like numbers, therefore I feel the 2.5m unit is far over-exaggerating their claims. Please prove me wrong, but the numbers just don't add up. This is why I believe Nintendo can't actually increase their Wii capacity as quickly as some believe possible. Again, at Nintendo doing 1.0m units right now, that'd put them at 62m units LTD at the 5 year mark, assuming every shipped unit sold. Obviously I calculated them doing 1.6m units a month (a beastly number regardless) by 2009, and staying there till November 2011, giving them the 82m unit number.
Now you can be 100% correct here, but I belive the 2.5 million units manufactured is from Nintendos financial report, if they lie there wouldn't that give financial effects? I mean is that legal? You also have to remember that comanies usual stock part of the manufacored systems for holidays. Now this was not what we should discuss here, it was Wii. As I said before assambly the mothercard for the Wii should be quit simple and could be done in any electronic factory. The big problem is plastic parts which need new tools for the process, if Nintendo is using the existant tools up to 100% they need to make some new tools. That can take up till a year, first you should mill out the tool then test production and so on. I think it could be possible to increase the production uptill 1.5 million if the want somewhere early 2008, I don't know if that is enough. Now they also need IBM to deliver 50% more CPU:s so IBM might need to build up more factories and so on. The list can go on for ever what Nintendo need to solve.



 

 

Buy it and pray to the gods of Sigs: Naznatips!

your thesys: "Think of a number of how many years the Wii will sell for, and sell out for. 3 years? 4 years? 6 years? 10 years? I am talking about the current Wii we have, not a Wii+ or a Wii HD or any other sort of beefed up Wii to counter the PS3/360's HD-capability. This, I believe, is the achilles heel in everyone's Wii predictions." uhm... so ps2 won on gamecube... people dont' buy console with best graphics!!! your thesys is wrong. you my argue that ps2 was out before cube. but again... people didn't choose new better graphics console... so maybe you're right when you say that wii won't be 70+... but for sure ps3 never reaches ps1/2!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! first year in japan ps1 was owned by saturn... after ff7 and piracy explosion ps1 gained number one. ps2 played alone with the poor dreamcast died... now that FOR THE FIRST TIME sony has rivals ahead they din't sell well... i'm speaking of japanese market ... people clearly buy ps3 only for bluray... the same situation of psp... so in the end maybe nintendo won't sell so many units as ps2... but in different conditions the real surprise is wii... as ds was ...we all remember when psp and ds was showed for first time... "nintendo is doomed!!!" ehehehe



HappySqurriel said: A few things to consider ... The top 5 best selling systems of all time are: Gameboy (Nintendo) 118,690,000 Playstation 2 (Sony) 111,250,000 Playstation (Sony) 102,490,000 Gameboy Advance (Nintendo) 76.77 Nintendo Entertainment System (Nintendo) 61.79 Your comment on Nintendo systems selling poorly after their replacement showed up is incorrect as the SNES and Gameboy sold 10 Million units after their follow up appeared, and the Gameboy advance has sold nearly 20 Million units since the launch of the Nintendo DS.
I am reffering to consoles, not handhelds. There are different rates for both. The N64/GC are very good examples of it. The N64 sold 800k in 2000, then dropped to 155k when the GC launched. The GC went from 633k to 233k when the Wii launched (vs. previous year). Therefore both systems dropped roughly 66% or more when the new CONSOLE came out. The PS1 went from 1m to 760k when the PS2 launched. The PS2 went from 1,761k to 1701k when the PS3 launched - around an average of 13%. Thats a rate of 5 times LESS versus Nintendo systems. A stark contrast.
Your 1 Million per month estimate negates the boost that all systems get at holiday periods, the Nintendo DS sold (roughly) 5 Million units in North America and Japan in November and December of 2006 and (as a rough guestimate) probably 7 to 8 Million units world wide in that time frame.
System SALES get a boost, but MANUFACTURING does not increase to a proportinate percentage. Typically, you will see every manufacturer cut shipping of units 3 to 6 months prior to the holidays, to build a sizeable inventory for the holidays. Consider the 360: In the quarter before the holiday period, MS shipped LESS than 1m units in 3 months. In the holiday quarter, they increased shipping to reflect the fact that they stored many systems back (they shipped around 4.4m in the holiday quarter, FYI).
Basically, if you're able to average 1.2 Million units a month outside of the holiday season and 8 Million units in the holiday season you'll sell 20 Million units in a year; if you can do that for 5 years you break 100 Million units.
Exactly how can Nintendo magically increase their production capacities by 400% for only 1-2 months? These factories are already running nearly 24/7. They would have to somehow either buy/aquire factories for just a month or two, which is not financially feasable. Again, as I stated, this is why companies lower their Q3 and even Q2 shipments to prepare for the mass sales in the holidays.
Now, the reason I wouldn't expect Nintendo to break 100,000 units is that you could claim that the only systems which have done that have artificially inflated numbers; there are a lot of duplicated Gameboy sales because of the Gameboy Pocket and Gameboy Color and the length of time the system was available, and the Playstation and PS2 have well known disc drive problems and were avaliable for a long time which increased their resales.
So these disk problems are the reason the PS2 sold 1.7m units in NA this December? Of course systems break and need replaced, and add to the number. However, this rate isn't as high as your trying to make it out to be. If the breakdowns really helped, then the Xbox 360 would be at 20 million units SOLD because of the supposed mass hardware failures at launch Truth is, 3-5% of systems fail. Even if 10% of the PS1/2s failed (2-3x the typical rate) during the first year, that'd only help the PS1's numbers by *maybe* 500,000 units during its first year, and the PS2 by around 2 million (remember, the PS2 only launched in Japan for the first 8 months before it came to the US, and by then, the correct console revision was nearly done)



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