If Nintendo did a "Blitzkrieg" with their production, you know, maybe 20 million in one year, would people still be talking about the PS3 or 360?
^good point in nin flooded the market it would probably be a death toll for micro and sony
Right now Sony and MS should count their lucky stars that the Wii is supply capped.
| Vizion said: Nintendo could have capitalized immensely if they weren't so conservative and had more Wiis produced. I wouldn't doubt there could have been 10-15 million more Wiis in people's homes today if there were that more many available. If the userbase was that much larger even more developers would have shifted more of their resources to the Wii thereby creating an even higher demand for the Wii and decreasing demand for the 360 and PS3. All year long the Wii was selling like hotcakes and Nintendo still didn't increase production to meet demand especially for the holiday seasons. What a huge opportunity Nintendo missed. Don't get me wrong, Nintendo is still greatly successful even with this huge mistake. But they could have been so much more successful and dominant in the console market if they had more Wiis produced. |
Why would Nintendo, who have been struggling to sell past 25 million consoles in the two previous generations produce 25-30 million Wii's for the FIRST year?! That would be an amazingly rash and idiotic business decision, regardless of the outcome.
There was no way for them to know whether the Wii would sell at all, and at which rate it would move. Hindsight is 20/20, in business and everyday life... Unfortunately; it can only be applied AFTER, hence the expression.
Renar said:
To make the outsource production as flexiable as you'd would like ('you make your contracts scalable and extensible. Also, production capacity does not have to stick around forever. You just write options into the contract.') is going to cost Nintendo up front. Nintendo has to find Chinese manufacturers that have high quality, does minimal prirating (ie the 'Viis'), low cost, good assess to getting parts deliveried them. To ask all of Nintendo's parts and assembler manufacturers to give maximum quantity flexiablity as well can be done, but at what cost? From mid-July to mid-October, Wii sales in Japan fell over 80%. And back up 450% to now. Since it is possible for demand to vary this much, that would have to be written into the contracts. The way to get the cheapest unit cost is to guarantee the manufacture a set amount. Such as the 1.8 million a month. No way will a manufacture give you the same cost per unit if you tell them, this month we want .36 million, but in a few months later, we want 10 times that much. |
Extensible = leave the option open to contract with other facilities should your initial contractor reach maximum capacity.
Absoloute cheapest unit cost doesn't mean much when you are missing out on hundreds of millions of dollars in revenue. Penny wise and pound foolish.
| Godsmurf said: 1. Producing too many Wii's was not such a big risk - the console has years to go so any surplus could eventually be used. 2. Apple never seems to have a problem meeting demand for new iPods at launch day btw, let alone a year later. |
1. THe Wii outsold the gamecube in ONE year in many places. No one could have predicted this, so its totally foolish to suggest that they could have built up stock because it would sell eventually. Even the most liberal of demand estimates would not have suggested this. Can you imagine Sony making 120 million PS3s in the first year "hey we have the next 6 years to sell them!!!"
And as a matter of fact, having extra stock can kill a business, there are many examples of this in the video games
2. Awful analogy.
All apple need is basically a hard drive & a few other pieces. The first time they tried to go beyond that (the iPhone), guess what, they ran out of stock!
No they blew it with the game cube. Wii is already 2/3's of the way to gamecubes life time sales. If Nintendo met the all demand people wouldn't be talking about how much they want a wii but they cant get one because everyone is buying one. Making others want a wii because they think its really good (true but non gamers wont know that).
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