| FishyJoe said: Also, it's not clear at which price point which the breakeven point occurs. Are they basing it off the $599 or the $499 price? |
Unless they think the 60 GB inventory will last until March, I guess the negative margin is also valid at $599. Although they're probably planning to sell the 80 GB at $499, so...
Another interesting tidbit, roughly transcribed:
Q: I have another very detailed question about game inventory [...] You also say that the negative [profit] margin is declining, which suggests that there's a lot of inventory you've accumulated till the end of June. About 2 million was the level in March. How much have you increased it until the end of June and until September how will you fare in terms of inventory buildup?
A: The last time we said inventory was 1.9 million and currently it's about 2.3 million, in that range. And as I said before the first-quarter sales were less than we had been expecting and for the year as a whole the unit number is still 11 million that we'll be selling. So capacity wise we need to produce parts and components ahead of these requirements, and the sales peak will come in November or December, so to match that peak increase, inventory is bound to increase and going forward and beyond that inventory will begin to decline rather fast. So comparing the beginning of the year and end of the year inventory will have declined. End of September inventory will be slightly more than 2.3 million.
Conclusion: they really believe this 11 million number and have to increase production. I still can't believe they're planning to ship an average of 1.15 million consoles per month until March 2008... Isn't that Wii levels right there?
My Mario Kart Wii friend code: 2707-1866-0957
