Wii is going to have a tough time of things in, 'Others'. It is also going to start falling back in Japan. I think it will be stron in the US for longer than the other territories though. That is all.
PSN - hanafuda
Wii is going to have a tough time of things in, 'Others'. It is also going to start falling back in Japan. I think it will be stron in the US for longer than the other territories though. That is all.
PSN - hanafuda
Nobody is crazy enough to accuse me of being sane.
Very nice article. But, there may be a few things not taken ibnto account. 1)If what Gamestop asays is true, then Nintendo has more systems in storage. This is probobly to stock up and save systems for big selling points. It's likely that Nintendo is producing more then we know of. And if there is enough demand, Nintendo will continue to up factorie production throught the systems lifespan.
In Japan, HD penetration is already huge (over 60%), and Wii is outselling the others combined 3 times over each week.
"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."
Satoru Iwata, Nintendo President. Only slightly paraphrased.
@mrstickball: I think it may well become true that the Wii will have a shorter life than PS and PS2, though you don't give a cause for your proclaimed Nintendo Law of falling console sales, so the Wii may also turn out to have Sony-like legs after all. I think Sony-like longevity is based on the ability to a) tap different demographics and b) different international markets (from US and Japan to Western Europe and Australia to Eastern Europe and Latin America...) over a system's life, and c) manage rich 3rd party support. What I do think is flawed is your assumption that Wii sales within a given year are mostly determined by supply issues. This is just not the reality of our markets and the computer industry. Sales potential is mostly determined by how much you can attract costumer interest. With some 6 months to prepare a big company like Nintendo could order from the factories any amount of systems for the Holiday season they think they can sell, be it 100k, 1 million, or 10 million. Just look at the iPod. Apple changed their whole lineup for Holidays '06, with 1 upgrade and 2 completely new designs, while old designs were discontinued. Yet they managed to produce and sell 21 million units within the Holiday quarter, a 50% increase over 1 year ago. If demand is there, Nintendo could not only ramp up to 1,1 million units/month in April, but further to 1,5 million in July and 1,9 million in October - and be at 20 million units sold by the end of the year. The real issues about planning production are not how much you can produce but how much you actually need and how fast you can bring the price down.
Hardcore gaming is a bubble economy blown up by Microsoft's $7 $6 billion losses.
I think the Wii will continue to sell large *and* Nintendo "rushes" the Wii2 somewhat (if you consider ~5 years rushing). They can keep the Wii1 kicking as a 3rd (or likely 4th) leg, like they've done with their handhelds successfully (the GBC held on for a while after the GBA, just as the GBA is still kicking alongside the DS). An "early" launch would allow them to be a *bit* more aggressive with the specs (e.g. a $300 system that doesn't have to totally replace the last one right away), and would put the squeeze on MS and Sony which need a *LONG* cycle to have any hope of turning a profit.
re: Nintendo's ability to ramp up production, I think there's a crucial difference between Nintendo's manufacturing model and that of, say, Apple with the iPod. While Apple's products are assembled entirely from commodity parts purchased from outside suppliers (plus some simple/cheap bespoke bits like cases), Nintendo actually owns (if they've stuck their their traditional model anyhow) much of their fab' in order to keep down costs (the alternative is to end up in the Xbox1-Nvidia squeeze). While there are lots of commodity parts in the Wii, a lot of it is actually very bespoke. E.g. the Wii CPU and GPU have effectively zero value to anyone who's not Nintendo. While they can certainly contract outside chipmakers to make more, they will pay for that, and they won't have much if any wiggle room in terms of their order.