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

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

mrstickball said: Squirrel - I understand that Nintendo can easily get warehouses to hold Wiis in, as they do that with DSes. Here's my issue: The Wii is selling right now @ 1.0m units per month (give or take). Nintendo will increase their abilities to 1.1m or 1.2m in April and stay at that. Now, the question is, how are they going to increase SUPPLY in the holiday months? They won't buy/purchase/aquire more factories (atleast at a very large #), but they will do like you said: store Wii units. The issue with that is it lowers the 1.2m "average" which is exactly that, an average, and that's what I meant it as. I believe Nintendo might sell 1.0m units a month from now till October (on average), and stockpile the extra 200,000 units each month to then give them an extra 1.6m units for the holidays. Again, my number of 1.2m a month for the next 12 months is just an average based on maximum possible sellthrough + the fact that Nintendo will decrease their supply to retailers in the months preceeding November-December, as every company does.
I understand what you're saying but I think it is a flawed assumption that Nintendo will stop at producing 1.2 Million Wii systems per month ... Today, after 5 months on the market, people lined up for the opportunity to purchase a Wii at my local Toys-R-Us stores; the same story played out across most of North America and the Wii is difficult to get through most of the world. Nintendo is selling 1 Million units per month and is failing to meet demand in a time when they're not releasing that many games; if demand keeps up like this they will end up selling 1.5 to 2 Million systems on the months when big games are released. Nintendo are not fools, and know they will need to satisfy demand and have (at least) an additional 3 million units available for the holiday season this year; that works out to being that Nintendo needs an additional 500,000 units produced over demand to be ready for the holday rush. In other words, the smallest number of units I would imagine Nintendo boosting production to is 1.5 Million units per month; if that still doesn't match demand, or if their holiday supply does not grow at an adequate rate, I would expect Nintendo to increase production again in a couple of months.



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HappySqurriel said: Hus said: Ohhh some one has some time to kill. Pretty optimistic. wiis hardware hdtv penetration future proofed competitiors are working agianst its sales. Allow me to fix that for you: Fast Selling Wii hardware Low HDTV penetratio Slow Selling and Expensive future proofed competitors
fast for how long.... Elmo sold fast for a while, what exacly will keep wii selling that fast for 5 years ? "at the end of 2005 there were already 2m 'HD ready' TV households in Europe and by 2010 there will be more than 50m 'HD ready' TV sets" "By the end of 2005 there were 19m households with HDTV sets in the US (17% of total TV households)" "More than one in two households will own HDTV sets by the end of 2010. Leichtman projected that 55% of U.S. households will have at least one HD-capable set by that point, while Kagan was more bullish, estimating an 82% penetration rate." 360/PS3 prices will come down, games will drive hardware sales... you don't get Halo or Gran Turismo on wii.



Hus said: fast for how long.... Elmo sold fast for a while, what exacly will keep wii selling that fast for 5 years ? "at the end of 2005 there were already 2m 'HD ready' TV households in Europe and by 2010 there will be more than 50m 'HD ready' TV sets" "By the end of 2005 there were 19m households with HDTV sets in the US (17% of total TV households)" "More than one in two households will own HDTV sets by the end of 2010. Leichtman projected that 55% of U.S. households will have at least one HD-capable set by that point, while Kagan was more bullish, estimating an 82% penetration rate." 360/PS3 prices will come down, games will drive hardware sales... you don't get Halo or Gran Turismo on wii.
If the Gamecube sold like Elmo Final Fantasy and Metal Gear would have been ported to it and it would have (probably) sold as well as the PS2; what will keep it selling well is that there will be a lot of games produced for it because it has sold so well. Also, you missed some points from th leichtman survey: 26% of HDTV owners have more than 1 HDTV set HDTV owners have a mean household income of $89,500 - 42% above average http://www.leichtmanresearch.com/research/hdtv_brochure.pdf



Funny you mention the PS1 sales and then say it cannot sell that many because of inferior hardware. Lets see PS1 was a 32 bit console and still outsold the 64 bit N64 and was still selling when the 128bit Dreamcast and PS2 came out. Your logic is very flawed in that regard but it is anyones guess how well the Wii will end up selling in the long run but its specs have NOTHING to do with it at all.



HappySqurriel said: Hus said: fast for how long.... Elmo sold fast for a while, what exacly will keep wii selling that fast for 5 years ? "at the end of 2005 there were already 2m 'HD ready' TV households in Europe and by 2010 there will be more than 50m 'HD ready' TV sets" "By the end of 2005 there were 19m households with HDTV sets in the US (17% of total TV households)" "More than one in two households will own HDTV sets by the end of 2010. Leichtman projected that 55% of U.S. households will have at least one HD-capable set by that point, while Kagan was more bullish, estimating an 82% penetration rate." 360/PS3 prices will come down, games will drive hardware sales... you don't get Halo or Gran Turismo on wii. If the Gamecube sold like Elmo Final Fantasy and Metal Gear would have been ported to it and it would have (probably) sold as well as the PS2; what will keep it selling well is that there will be a lot of games produced for it because it has sold so well. Also, you missed some points from th leichtman survey: 26% of HDTV owners have more than 1 HDTV set HDTV owners have a mean household income of $89,500 - 42% above average http://www.leichtmanresearch.com/research/hdtv_brochure.pdf[/quote] Problem is wii hardware is so weak no big games can be ported to it. LOL since the HDTV owners are so rich a $600 PS3 is be pocket change for them. This is perfect.



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Hus said: Problem is wii hardware is so weak no big games can be ported to it. LOL since the HDTV owners are so rich a $600 PS3 is be pocket change for them. This is perfect.
Who said the Wii would need Ports? You port away from the popular system to the unpopular system ... My point was the 17% of the population who is wealthy had no problem buying a HDTV and may buy a PS3 but the average consumer is staying with SDTV. The PS3 is a product which 75% of the people do not have the equipment for currently and only 55% are predicted to have the equipment for at the end of 2010 ... The Wii is the system for today which is why it is selling better, will continue to sell well through most of the generation and will gain most of the third party support.



HappySqurriel said: Hus said: Problem is wii hardware is so weak no big games can be ported to it. LOL since the HDTV owners are so rich a $600 PS3 is be pocket change for them. This is perfect. Who said the Wii would need Ports? You port away from the popular system to the unpopular system ... My point was the 17% of the population who is wealthy had no problem buying a HDTV and may buy a PS3 but the average consumer is staying with SDTV. The PS3 is a product which 75% of the people do not have the equipment for currently and only 55% are predicted to have the equipment for at the end of 2010 ... The Wii is the system for today which is why it is selling better, will continue to sell well through most of the generation and will gain most of the third party support.
There will be more HDTVs then then any of the consoles, PS2 sold 42 million in the USA even if PS3 did that good there would be more households with HDTVs then PS3s! theres goes that argument.... but my househols is only 30k a year... me 12k of that, and we have a $2000 HDTV ? ohh... NOT wealthy people can afford HDTVs... your argument is totally dead....but to truely end it. you can get a 30" hdtv for $500 my god thats to expensive for people LOL.



mrstickball said: Also, if anyone looked at the chart I put for discussion: The chart I gave is for the 4th through 7th Christmas + next January for the PS1, PS2, Xbox and N64. For the Wii, this would be 2009 through 2011. I made the chart to show how critical those years are. For the Wii, the issue is, that it *could* (and Im only saying could, not will, or won't) be the years that the Wii starts to lower in popularity, or a Wii 2 is launched. For the PS2, those 3 years were Dec 2003 through Jan 2006 - It sold MORE than 50% of it's LTD in that time period. For the PS1, those 3 years were Dec 1998 through Jan 2001 - It sold MORE than 50% of it's LTD in that time period. For the N64, those 3 years were Dec 1999 through Jan 2002 - It sold LESS than 30% of it's LTD in that time period. For the Xbox, those 3 years were Dec 2004 through Jan 2007 - It sold LESS than 30% of it's LTD in that time period. Whats the point of this? There is a 10 million unit gap between the PS1/2 and the N64/Xbox because of it's December #4 through January #7. There is an inherant relationship between a companies ability to both make and sell systems during that time period that either will make or break a company.
I think this chart is very important but you have to interprete it completely different. The reason why ps 1/2 sold so much in their years 4-7 and n64/xbox sold so poor is to find in the previous years. I guess after two or three years in a console-generation-lifecycle, the winner becomes clear, and after that, the most third party resources are moved to this console and it starts to sell really well. The sales in the late years are not dependent on the company producing the console, but on the sales of the console in its first years. In my opinion, you are also mixing up this point if you say that nintendo consoles don't sell well after the next generation is launched. the reason why n64 and gc stopped selling after the launch of gc/wii was that nintendo gave them up already a year before. i mean, who would do different? if you were nintendo, would you still release games for the gamecube right now? of course not, because it is a dead console and it already was before wii launched. but if you have a console with a userbase like ps2 (or gba, which is a good example for what i'm trying to say altough it's a handheld and not a console) you can still make profit by releasing games for it, and, what is even more important, third parties can make profit too. I hope you understand what i'm trying to say, I think i've written it a bit difficult... there are a few other points where I slightly disagree, but they have already been mentioned by other persons. In general, your post is a very good read and it contains some important observations.



Currently Playing: Skies of Arcadia Legends (GC), Dragon Quest IV (DS)

Last Game beaten: The Rub Rabbits(DS)

Like it was pointed out already, the Wii doesn't need to reach such high levels of sales. Because Nintendo already makes profits on each console sold. If the Wii reaches 40+ M of sales, it will already have succeeded past everything Nintendo have hoped, and if it gets 60+ M, or more than the NES, Nintendo can say they reached nirvana in their strategy. Everything beyond 70+M will be a godly bonus to them. Then, even though I know a Wii2 is already being prepared, Nintendo will have no incentive to can their Wii. I think they will have the same strategy as with the DS, even though the Wii2 will not be just a redesign : it will be completely retro compatible, but more powerful with HD and all. But they will release it when they predict the Wii numbers dwindle below their competitors', and they will wait holidays period. They won't just destroy their Wii sales like that, if it's still selling strong, that would be nonsense. But they will transition nicely into the Wii2, so that even if competitors copy their features, consumers will stay with what they know works, and won't jump ship (natural evolution). That's assuming the Wii wins though, by selling more units than the other two.



1. Actual console shipments were about 103 million for PS1, currently probably just about 115-120 million for PS2 (though 125 and 135 will be hit easily), and about 61 million for NES. 2. While PS1/2 did expand the market in NA and Japan, the primary reason for their growth over NES/SNES/Genesis was the tapping of the European market. 3. Nintendo systems haven't lasted after their successors showed up... Not true. No lesser-selling system has maintained huge sales into the next-gen, while every higher-selling system has. The one sort-of exception to this is the SNES--the most mismanaged "winning" system of all time. 4. The NES was considered outdated in 1983, compared to the 16-bit computers of the time... And continued to sell well into 1992, even as the market became cluttered with much more powerful systems. The 32-bit PS1 was "outdated" when the N64 launched, but sold well over 90% of its lifetime total after that point, continuing good sales into 2003. In fact, the PS1 sold more during PS2's lifetime than GC or XB did. The power of a system doesn't matter compared to its ability to continue to sell to new markets. Considering Wii is basically an "up-to-date" system for 2003 or 2004, there's no precedent for it not being able to reach at least 2012 with good or great sales. 5. People suggesting that 25 or 35% of PS1/PS2 sales came from replacement systems are nuts. You can tell its not ridiculously high just by looking at attach rates: Do you really think PS attach rates are 13:1, 14:1, 15:1?? That much higher then every other system in history? Nah. Edit: 6. Nintendo will be continually upping Wii production for as long as they need to to meet demand. It won't halt at 1.2m/month.



"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."

Satoru Iwata, Nintendo President. Only slightly paraphrased.