TheBigFatJ

Stockpiling makes a lot of sense.

The reason it is better to have more product during the holidays serves a few purposes.

1) The demand is always higher during that season, and with it brings extra sales (accessories and games). The same sale during the summer might not be accompanied by extra games and controllers purchased. This is also better for the stores because it means more consumers spending more money during the time of year where they go in the black (make profit).

2) It's a brilliant PR move to outsell the competitors during the holiday season. If they only had roughly 400,000 Wii's during november and 400,000 for december in NA, they would lose to both Sony and Microsoft.

3) Many people who have been waiting since last christmas for a Wii will probably jump ship, tired of waiting for a whole year for a product that will continue to be in short supply. Having extra stock gives them a better chance of finding it during the holidays when everyone is looking.

I'm not sure why you are so convinced they aren't stockpiling. Losing another holiday to the 360 would be foolish.

 We're talking about Nintendo holding Wiis in warehouses, or something along those lines.  Holding Wiis from retailers.  Once the Wiis get to retailers, they get sold.  And yeah, they do hold Wiis til they get like 20 or so, but that's just so they can have a big sale instead of selling a couple every morning.  Or because big shipments on Sunday or whenever sell out by noon anyway.

But we're talking 500k or so sitting in warehouses every month, so that Nintendo can sell 3-4 million or whatever in November/December, so that the competition doesn't beat them. 

well it would explain why they said they increased production by 500k a month but we haven't seen any actual increase.

The system is experiencing more demand than Nintendo can handle.  Further increased demand would offer no value by itself -- so why do you think demand itself is more valuable during Christmas? If the system was selling now, it could sell more games and accessories now as well as at Christmas. Nintendo doesn't "go in the black" during black Thursday. A Wii sold now is as profitable as it would be during December, and it gives Nintendo the chance to sell more games and more accessories now, in addition to those kids who get Wiis now getting additional games and accessories for Christmas.

Unless stockpiling will make those Wiis magically multiple, this makes zero sense.  If Nintendo will have a total of X million Wiis available before Christmas or at Christmas, how does selling them later satisfy more people?  It doesn't -- the same number of people will get Wiis.  As long as there is more demand than Nintendo can handle there will be disappointed people.  I don't see how saying, "okay, they're all going to be available at X time" will get the system to more people and therefore satisfy more people.  If anything, having to wait artificially for the system would only make them more likely to 'jump ship', as you say.

No, it isn't. >95% of people buying the Wii will not know that they outsold Sony and Microsoft.  Even if they did, it isn't a big PR win because normal people don't care who sells more.  They care about what they want.  If it was such a great PR move to 'win' Christmas, why wouldn't MS make an artificial shortage now? That would be tantamount to what you're claiming makes sense in this case.

Why does it matter who sells the most in December? What about the rest of the year? How is it so valuable to hold the units back and ultimately sell fewer games, less accessories and stunt the total level fo demand by (1) not getting "the message" to the masses and (2) turning off customers who are actively looking now. 

It seems like people who think N is stockpiling will use anything to convince themselves it's true, regardless of how ridiculous each argument is. Nothing here is remotely convincing or even suggests Nintendo is stockpiling because none of it uses reasoning that makes business sense.  You continue to look at a small idea and say, "this is why" when, in fact, that idea makes no sense in the grand scheme.

Some people believe Nintendo is producing 1.5 million units per month. Does anyone have any way to verify this beyond Nintendo stating they were hoping to increase production to those levels? 

Some people suggest that because of Nintendo's announcement to ship X units this fiscal year suggests they must be stockpiling. No, it doesn't. Nintendo continues to state that they're working to increase production -- this suggests that their production will be significantly greater by the holiday if they can manage it. If they were at 1.5 million now, as people suggest, and were still trying to increase production as Nintendo continues to state, then they'd ship a hell of a lot more in fiscal '08.  In fact, the numbers they're stating combined with their recent comments about trying to significantly increase production suggest they're *not* producing 1.5 million Wiis per month yet.

Yes. This is obvious. Why do people insist on saying it proves or even suggests they're holding units back?

Stockpiling does make sense for 2 reasons.

1.) The Holidays. If average Joe goes to a store around this time of year and can't find a Wii, no sweat. He can find out when they restock and get one next week or the week after. It might take a little more work and hunting, but if he really wants one, he can find one. Nintendo still makes the sale.

Not true with the holiday season. Many of the purchases made in late 07 are for Christmas, Hannukah (sp?) and other major holidays. If Christmas rolls around and average Jill can't find a wii, well, (and since during the holidays demand will increase this will make it MUCH harder to find) and she's got a ton of other ppl to shop for and tons to do (the holiday season is generally more stressful for ppl) she doesn't want to go hunting. And suddenly, she decides to get her boyfriend/son/daughter/grandma something else. She will not be back next week. Nintendo has lost of sale. Multiply that by a million.

If Nintendo stockpiles it will:

-Not lose holiday sales (that won't come at any other time)
-Spread supply to where demand is greatest (always a good thing to do economically)

 A lot of the smaller PAL markets have sufficent Wii stock levels.  This is not so much that the supply issue has been remedied than it is those territories typically are not known for buying lots of Nintendo home consoles.

It's still a major supply problem across most of the world.   Unprecedented to be sold out this long post luanch in just about any region.

Your POV still doesn't hold up, unless you can show us proof that releasing whatever they have withheld thus far (which we are speculating on as is) would SATISFY THE DEMAND AND ALL OF THE CUSTOMERS CURRENTLY SEEKING THE CONSOLE. Otherwise your argument is basically saying this:

"Its better to give a few more consoles out now, and stop the lineups at my local store this month, than to satisfy those lines come later this year when they will be 3x as long due to increased demand for the holidays.

Someone summed it up perfectly ck, it doesnt matter if the systems were released now. All that would do is SCREW the consumers later this year expecting to go christmas shopping with the rest of the PLANET and pick up gifts for friends and family. BOTH situations some customers are going to get flat out screwed. Why? Because releasing them now, or during christmas doesnt matter, there wont BE ENOUGH. Selling 2m in August and selling 300k in December and November is in NO WAY better for the "consumer" than selling 300k in august and 1m in both Nov and Dec is. It is in NO way better. The end result is the same, some customers satisfied, others left out in the cold due to unprecedented demand this industry has never before seen. How about this

Are you going to try and convince ME that if those people actively searching now were relieved that they wouldn't be REPLACED by even MORE active seekers during the biggest retail and shopping season of the YEAR?

No you cant say that. Thats why I just feel your point is moot. Your arguing that moving the stock around would somehow be better for the consumers when it really wouldnt be. What it would do is partially satisfy now, and massively dissapoint later. There is a lesser of two evils here, the lesser just happens to ALSO make good business sense as well, thats why countless industries operate this way. 

 I dont think N can increase production that much, for example in NA on the week ending Dec 23 2006 there was a total of 2.3M units of hardware sold. On the week ending July 29th, there were 0.3M units of hardware sold. 7.7 fold increase. Currently N sells 230k Wii a week worldwide on average, times that by 7.7 and you end up with 1.7M PER WEEK that they would have to make.

 Of course thats just an example and isnt entirely accurate given that this isnt 2006, its a new gen, the Wii is still sold out and all that. But it does kind of give you an idea of how much demand increases over a holiday.

Rath, those 2.3 million were in essence stock piled prior to the actual system launch.

As for increased manufacturing, this is already taking place with more on the way.

Nintendo themselves do not manufacture the Wii (Same goes for X360 and the PS3) but outsource it. They've been in discussion with other corporations that will hopefully begin manufacturing the system to supplement the one company, Foxconn, currently manufacturing them. Wistron Corp should getting units out by the holidays as they begin to stop manufacturing the X360. Asustek should hopefully jump on it too.