z64dan said:
Nintendo has explained that they are now producing ~1.8 million consoles a month. So, of course there are questions abound! 1. Will this 1.8 million production rate continue after the holidays?
2. If it does, will that be enough to satisfy the non-holiday demand (Jan-Oct 2008)? (remember Nintendo WAS producing 1 million/month, and selling out in many places still).
3. How about the 360/PS3? Will their current price cuts help them (mostly 360) keep up with the Wii sales? The 360 is doing a fine job so far this holiday season, but can it continue? |
The simplest way to explain this is this:
A console company does not increase production unless they expect to require it for the long term. The cost of increasing production is only worthwhile if you are going to need that level of production for the long term. This is the reason most companies do stockpile for X-mas. Rather than increase production for a few months out of every year they increase their normal production and stockpile the extras throughout the year.
So in short, if you consider that Nintendo is a conservative company we know that their internal projections are calling for at least 1.8m per month. They might be increasing production still or they be staying steady, but no matter how you look at it they think they will need it.
Obviously internal Nintendo projections aren't the final word on what demand there is going to be, but I think if you keep in mind Nintendo's conservative nature it is probably a safe bet, even if its not a gaurantee.
