YfzinJay said: NJ5 said: YfzinJay said: For anyone that thought they were stock pile wii's it would just be unrealistic. WHy would nintendo spend money to stockpile wii's, when they can easily just sell them to retailers and make money? 1- Because the holiday season is the most important sales period of the year. If a kid wants a Wii for Christmas and his/her parents can't find one, there's a possibility they'll get a 360 or PS3 instead. 2- An even simpler way to look at it is that it's a good business principle to try to match demand with supply as much as possible. Demand is higher in Christmas, so supply should also be higher. 3- To get a load of free advertisement in newspapers ("Wii wins holiday sales" articles)   That's not what I meant. I meant if nintendo had consoles to selled they get them to retailers as soon as possible. You are talking about production scales. Obviously if nintendo could make more consoles, they would.

No, I'm talking about why it's a good idea to shift supply to the holiday season. Of course the best solution would have been to increase production to crazy levels, but that did not happen for several reasons:

1- Nintendo is pretty conservative.

2- It's not easy to quickly increase production, it takes months at least. Increasing production implies producing and assembling thousands of components at a faster rate, every single component has to be accounted for. Consider also that components come from different vendors, they're not all produced by Nintendo. It's very easy for bottlenecks to start appearing, and they're not easy to solve quickly.

3- They want to keep quality (which contributes to number 2)

According to my (and many other posters') theory, the second best solution is to stockpile units for the holiday season. Pretty soon we'll know if this theory is right, and then we can stop discussing this subject which is frankly getting tiring.

 

dtewi said: Nintendo's first lie.

Not a lie. Just a cleverly worded "hiding of the truth". Everybody stockpiles their stuff to meet holiday demand. However, they weren't stockpiling it to spur demand. They were stockpiling so they could meet a certain part of demand. It's just clever wording. Like Reggie is known to do.

Nintendo's George Harrison states (clarifies?) that Nintendo isn't warehousing anything.

http://www.wired.com/gaming/hardware/news/2007/11/wii_shortage

"Typically, we'd have begun stockpiling console hardware back in August" for the holiday season, Harrison says. "But this year, we were selling all the Wii we could get, and we got all the way through the summer with basically no inventory in our warehouse."

I'll leave it to the tin foil hat wearers to debate the wording choice of "through the summer" instead of "through the fall."

Hmm.

I still say they've got tricks up their sleeves.

Grimboyjr said: So really my chance of finding a Wii is really small this holiday season....*sighs*

if you're willing to find out when stores are getting them and CAMP out a bit, you can definatly 100% get one. I got 4 during last Christmas as favors/gifts. I actually enjoy the camping out part meet lot's of cool people.

That seems to have been the popular opinion for months now, but I've never believed that. This speculation was going on all through the summer, and in one of those threads back then, I'd posted that I don't believe a company would build a tech product to not sell it. You don't warehouse something in demand now to sell later.

Warehousing proponents always said, "well you get all the software sales at Christmas time."

My take was always that you lose all the software sales you could have had from the day a Wii was built but not sold through to a customer. Nobody buying a Wii now will go back and buy the tripe that was released back then, and you've further reduced their holiday software buying budget by $250 -- the cost of the Wii. Already having the Wii in the home means they could have used that $250+ to buy 5 games, and been downloading VC titles all these months.

You lose third party developer faith by purposefully crippling your own install base when you could have been growing it. You lose money warehousing product that you could be selling.

Warehousing just makes no business sense. 

NJ5 said: YfzinJay said: For anyone that thought they were stock pile wii's it would just be unrealistic. WHy would nintendo spend money to stockpile wii's, when they can easily just sell them to retailers and make money? 1- Because the holiday season is the most important sales period of the year. If a kid wants a Wii for Christmas and his/her parents can't find one, there's a possibility they'll get a 360 or PS3 instead. 2- An even simpler way to look at it is that it's a good business principle to try to match demand with supply as much as possible. Demand is higher in Christmas, so supply should also be higher. 3- To get a load of free advertisement in newspapers ("Wii wins holiday sales" articles)

I have to say this, everybody "holds" stock for christmas, a lot of retailers do it as well. Stockpiling and holding for Holiday season I've always felt to be different. Stock piling I always thought as the rest of the year holding for the holiday exclusively for november& december. Stockpiling is to spur artificial demand, holding is to keep to sate demand during the most demanding season of the year(wow I said demand a lot..) Also I noticed someone saying they didn't always ship/sell every console they made. You realize many of these consoles go to developers, industry people, go away to promotions and giveaways and even get set aside for replacements as well as surely some are found to be faulty in their final stages and thus disposed.

Dryden said: That seems to have been the popular opinion for months now, but I've never believed that. This speculation was going on all through the summer, and in one of those threads back then, I'd posted that I don't believe a company would build a tech product to not sell it. You don't warehouse something in demand now to sell later. Warehousing proponents always said, "well you get all the software sales at Christmas time." My take was always that you lose all the software sales you could have had from the day a Wii was built but not sold through to a customer. Nobody buying a Wii now will go back and buy the tripe that was released back then, and you've further reduced their holiday software buying budget by $250 -- the cost of the Wii. Already having the Wii in the home means they could have used that $250+ to buy 5 games, and been downloading VC titles all these months. You lose third party developer faith by purposefully crippling your own install base when you could have been growing it. You lose money warehousing product that you could be selling. Warehousing just makes no business sense.

On the contrary, the Christmas period is the only time where you are likely to lose substantial portions of customers. 

During the middle of the year, people are buying video game systems largely for themselves; if they cannot find one, they'll usually wait. I'm sure a small portion get impatient and buy a PS3 or 360 instead.

The problem at Christmas is that most people are no longer buying for themselves, they're buying for other people, and that changes the game. Instead of just competing against the PS3 and 360, the Wii is competing against HDTVs, GPS systems, Ipods, Silk Neckties, games for systems the people already own, and so forth.

The criterion at Christmas is to find a gift that the receiver will like, and once that is satisfied, the gift giver stops looking. If they can't find a Wii with any alacrity, choosing another option besides a Wii will happen much more frequently at this time of year than it will in June. The fact that nearly every major electronics retailer stockpiles for the holidays is rather convincing proof of this phenomenon.  

Bodhesatva said: On the contrary, the Christmas period is the only time where you are likely to lose substantial portions of customers. During the middle of the year, people are buying video game systems largely for themselves; if they cannot find one, they'll usually wait. I'm sure a small portion get impatient and buy a PS3 or 360 instead. The problem at Christmas is that most people are no longer buying for themselves, they're buying for other people, and that changes the game. Instead of just competing against the PS3 and 360, the Wii is competing against HDTVs, GPS systems, Ipods, Silk Neckties, games for systems the people already own, and so forth. The criterion at Christmas is to find a gift that the receiver will like, and once that is satisfied, the gift giver stops looking. If they can't find a Wii with any alacrity, choosing another option besides a Wii will happen much more frequently at this time of year than it will in June. The fact that nearly every major electronics retailer stockpiles for the holidays is rather convincing proof of this phenomenon.

I agree with normal business models, but not with Wii. It's uniqueness makes it irreplaceable in terms of numbers that will have a lasting impact on the consoles lifetime sales. People who can't find a 360 may buy a PS3, or vice versa outside of the most loyal Sony fanboys or Halo die-hards, but the Wii bucks that trend.

If a person wants a Wii, they'll wind up getting one. 

Dryden said:   If a person wants a Wii, they'll wind up getting one.

 yeah, for ~$420 on ebay...