reverie said:
9 million Wiis: Where did you read that? And if you think the Holidays are a good time to stockpile for, why didn't they ship more Wiis for Holiday 06? Why didn't they sell 5 million Wii's last Christmas, can you tell me that? Are you suggesting it's worth for Nintendo to keep product in store for more than one year? Why not keep it for Holiday 08 or 09 then? Past consoles: Which consoles were held back from the market on purpose? As far as I can see most companies in this business had to fold because they could not sell enough. Statements from Nintendo: Fils-Aime said that they will ship Wiis at the highest level ever. That does point to production increasements, but not to stockpiling. |
"...As with the DS, the firm’s shipping forecasts for the Wii have risen, from 14 million to 16.5 million for the fiscal year.... "
Q1 was ~3.5m, its reasonable to assume Q2 & Q4 will be similar which leaves us with the very simple math of 16.5 - (3*3.5) = Q3 or if we simplify it down we get Q3 = ~6m.
Now I realize you are trying to say you think it will be more like this....
Q1 = 3.5m, Q2 = 3.8m, Q3 = 4.3m, Q4 = 4.5m. But the current numbers don't fit that hypothesis. Right now we have 2 of the 3 months of data for Q2 and the Wii needs to sell 1,314,344 units in this 5 week period to meet that 3.5m number. So unless you have some magic information the rest of us don't I'm not sure what scenario you are looking at. Because I do not think the Wii is going to sell 1.6m units WW this month. And if it doesn't meet the Q2 prediction you lay out it throws the Q3/4 predictions completely out of whack.
Honestly I think your prediction here should illustrate quite nicely that you are off base. The idea that they will sell 4.5m during Q4 while 4.3m during Q3 is absurd to say the least. I too think the post X-mas effect will be rather large due to the console selling itself but that is just crazy and completely ignores the Reggie comment I quoted below. Since we can see that your Q3 estimate would require something like Oct=0.9m, Nov=0.9m, Dec=2.5m just to attain launch numbers when Reggie he clearly states that it will be "substantially" more than that.
In responce to your questions on this issue, from what I have been able to garner from reading a number of articles, it seems Nintendo's supply chain was the issue and they were unable to support supply lines for that kind of volume. They were able to alleviate the problem to some extent but it came around March of this year from what I can figure. I think they are still in the midst of supply chain issues but much less so than before. Most of this is my speculation of course so you don't have to believe any of it, but the report is real enough and regardless of their reasons for it I think you have to admit its a pretty good reason to believe in stockpiling whatever the cause.
Past Consoles: See "Sony's Playstation 2" and "Nintendo's DS"
Statements from Nintendo: The part you are missing is this...
"..substantially more than the launch, substantially more than has been seen to date..."
If we look at launch we see in December alone the Wii sold just shy of 2.5m consoles. Substantially more than 2.5m doesn't sound like 3m to me but more like 4m-5m which supports not only my financial report analysis above but also my assertion of stockpiling unless you are claiming they can produce 4m units in a month. I'm not even sure they could produce 3m during a month this holiday. Shipping them last minute would be even harder, they have to be ready in advance to some degree.
reverie said: Edit: Regarding that "RED HOT" statement - this sounds like the Macho executive that has been mentioned in one article posted here a few days ago. Businesses don't prosper on the size of their executives' egos. If Nintendo had 2 million Wiis in stock now, and they sold it right now instead of Christmas, they could not only sell the same amount of games on Christmas, but also more games now. They would lose several 100k of game sales between now and Christmas, and they would lose millions of $ on interest because stock that doesn't move and doesn't increase in value (remember, no price increase for the Wii in sight) is dead capital. |
The red hot statement is not intended to be some sort of Macho "Hoorah". Its basic logic that if you release a game on a system selling unprecedented hardware you can expect similar sales boosts. But to do so during the holidays is another multiplier on top of it all. You can take it as a "Macho" statement if you wish but its intended to illustrate the point that you so sorely missed with the rest of this statement.
And that point is that Nintendo is selling rediculousness numbers of consoles right now, this strategy is entirely designed to penetrate further into untapped markets and bring in game consumers who will not buy a Wii outside of X-mas so that they can tap into a market of game buyers who wouldn't otherwise buy games. They are taking a calculated risk that the people who can't get one now will get one later. And yes there will be some of those folks who hedge in on the X-mas burgeoning but not all of them and Nintendo is only trying to reach that market so they will show their friends the unit. The idea is that they need to get into as many circles of friends as possible because they believe the system sells itself.
As far as your digs at the "us folks" who just want to believe in it. Well I will just say I find that to be very pompous considering your lack of evidence.
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