George Harrisson reveals current Wii production rates on Bloomberg

[Just_Ben]

omgwtfbbq said:

Then how do you explain that despite the fact that Nintendo are creating 1.8 Million Wiis per month, they're currently only selling about 300k per week (or around 1.2 million per month)? There's 600k unaccounted for. Not to mention that a few months ago production was reported to be at 1.5 million per month, but still sales haven't risen above 1.2 million per month.

Production simply doesn't ramp up that fast. Nintendo are really starting to produce but there hasen't been the increase in sales to show for it. So what happens to those 600k consoles that are produced but not sold? Obviously, these consoles are being stockpiled for November/December.

But don't take my word for it, watch Wii sales explode in USA throughout the Christmas season, and expect Nintendo to blow past 24 million sales by end of Q4 2008.

 

Some things I want to add (here my reference interview):

It takes 20 days from production to store shelf

t’s generally all coming in by boat from China. It takes about 10 days on the water to get to Seattle, then it takes about another 10 days to get them out onto store shelves themselves. That’s why the decisions about what we can actually achieve in the holidays were really affected by inventory that we’ve received already and how we planned to spread that inventory across retailers.

Production volume is allready set since month

I can’t give an exact number for November and December. We had to make our final decision on how much to produce each month for the holidays back in the summer. It takes about five months for us to increase the actual monthly rate of production. We’re at a rate now worldwide of about 1.8 million Wiis produced every month, and that’s going to sustain itself until we get on top of this. We’re trying to make decisions on almost a weekly basis about which market to ship the product to, because in Japan it’s a big success, and same in Europe.

Were they go is very variable, indicating that there is no stockpile

We’re really trying to follow each market’s performance. We review the performance every couple of weeks and try to have the inventory be as productive as possible, in other words, not to have it sitting in warehouse, but on store shelves. Each territory is doing the best they can to increase the sales for Wii and then fighting for the share of the available production.

How did Nintendo see the market a year ago?

It’ll probably slow down sometime in January, but what really surprised us in 2007 was that the holiday sales after the launch of Wii didn’t slow down in February or March. What caused us to fall behind was supply.

Now to VGC figures. A month is 30 days, so Nintendo producing about 420k a week. NPD would indicate (doesn't say it is so only indicates) that Wii is undertracked by ioi in NA, I say E.U. is also slightly undertracked. Lets just say overall the Wii is undertracked by only 10% (what is very well in the error range) that would give a sell through of 341 units last week world wide. Now lets say some retailers holded back some units for Galaxy (EU+US launch) and Black Friday (Highly likley) think about the 20 days the Wii need to go to the shelves. I would say if they stockpile, that pile isn't that big.

Edit: I put the Wii down to 19 Million EOY WW according to ioi datas on that time. I isn't that they couldn't sell more, I say they don't have more!