Can the Wii Reach 50% Before Years End?

[Avinash_Tyagi]

Stever89 said:

goddog said:
supply there is your issue.... nintendo has been slow to ramp up production to meet demand (yes i know they have upped it, but not enough, so its either ineptitude, or a plan to keep it short) after 2 years there is no excuse to be short now.

 

This has been gone over many, many times, so I'm not going to go into too much detail, but Nintendo has been increasing production every 6 months or so, and the last time they increased production (in July or so), they increased it by 33%, which is nothing to laugh at.

Increasing production is not as easy as flipping a switch, especially since Nintendo does not produce their own consoles, nor the parts that are in them. In order to increase production, everyone who makes parts of the Wii, the case, the controller parts, the parts inside the Wii, etc, all have to increase production as well. This means making deals with many companies so that those companies know they won't go through the cost of increasing production, which may not be cheap at all, just to have Nintendo say "we no longer need those parts" in the case that demand falls or isn't as high as Nintendo expected. Also, there comes a point where retooling and using more efficient processes can no longer be used to increased production at a factory, after those methods have been used before. Thus, they need to find another factory to increase production, which is costly and time consuming, since you don't just find factories that produce Wiis around the corner, contracts have to be made, the factory has to be set up, parts have to arrive...

My best guess is that Sony was only making 2 million consoles a month at the peak of the PS2s life. That's based off of the PS2 selling 21 million in a 12 month period, meaning they had to produce 1.75 million a month to cover that (stock piling consoles at the beginning of the year to cover holiday sales and major releases). Of coarse, normal products aren't sold out all the time, so with 2 million consoles a month, there's little chance that there would be supply problems. Nintendo is now producing 2.4 million a month (or even higher, since they said something about increasing production in Nov and Dec but I'm not sure how big those increases were), and they still can't keep them on shelves (though it seems to be getting a lot better). They are in completely uncarted territory. I'll say that production will tail out in the high 2 millions, maybe even very low 3 millions. They may not sell all those a month, but during the holiday season they'll sell most of those (but finally not be completely sold out), which is how a product should work (produce more than you need during the year, stockpile during the year, release more during the holidays, but hopefully not run out).

Overall, Nintendo has done the best job they can do, since you also can't simply raise production to 5 million a month (if that's even possible for the suppliers), because soon you will have way too much stock (or at least, I would HOPE so, lol), and then you have to decrease production, or have all the factories working at 50% capacity, which is wasteful.

 

 Either that, or Wii would be come a true infection on the world sweeping the continents and reaching hundreds of millions, even billions in hardware sales