HappySqurriel said:
Smash_Brother said:
HappySqurriel said:
250,000 Wii systems per week works out to (approximately) 3,000,000 Wii systems per year
3,000,000 Wii systems costs Nintendo (roughly) $3,000,000,000 to $6,000,000,000 to manufacture not a simple decision to increase production |
Where are you getting these numbers from? The idea behind commissioning factories is that the factories retool their internal structure to manufacture your product but you don't "own" the factory because, if you no longer require their services, they'll retool for another client and move on. |
The numbers come from it costing Nintendo $100-$200 to manufacture a Wii system through a manufacturing firm and the need to enter into 'long term' manufacturing contracts ... Nintendo has to pay for these systems regardless of whether they sell or not. Nintendo is a fairly conservative company and I expect they are worried that if they produce an additional 250,000 to 500,000 consoles per month they will soon meet demand and have a production surplus; if they're in long enough contracts this could work out to being up to a 10 Million unit inventory which cost Nintendo $100 to $200 to produce (a $10,000,000,000 to $20,000,000,000 inventory of unsold Wii systems) The contracts that Nintendo would have to enter into in order to increase production are large enough to require board approval; they are probably only going to approve of increases that do not put Nintendo at risk of overproducing at a level where they can lose billions of dollars in 1 year. |
