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Forums - Sales Discussion - After Some Analysis I believe Reggie is Not BS About the Record

Okay what did was I looked at the sales WW for the Wii at the end of July, the Wii had sold about 10.2 mil. I believe that they most likely had around 500-800k already stockpiled(Companies all leave themselves with some inventory so they can divert resourses in case of the unexpected) August is when they increase production to 1.8 million a month.

Based on this at the End of November Nintendo would have produced between 17.5 to 18.5(variation is based on exactly when they increase prodution and size of summer stockpiles) As of Dec 9 16.1 million Wii's have been sold worldwide leaving us with 1.4-2.4 million Wiis hiding somewhere. if Nintendo releases the same amount this week as they did last week they would have 750,000 to 1,600,000 Wiis in existence for the week before Christmas.

So if Europe gets a minor increase to 300,000 for that week, and Japan sells about 150,000 that would leave between 300,000 and 1.1 Million for US in that week. So if it falls some where in the middle we will have 700,000 Wiis available the week before Christmas which I can only assume would get sold. Also the 700,000 would break the record that Reggie was talking about, so it seems very likely to be near the right number.

One thing I did not figure into these number is any Wii's produced in December(which would be an addition 1,100,000 by the time the week started)

I did this for 2 reasons.

1. To compensate for any over calculations I could have made(possible)

2. To stick with the theory that Nintendo always holds some stock(if it is a bad theory it would even out my numbers since I calculated it earlier.)

This really jibes with the New Policy for the Holidays that Nintendo put in place that says "The retailers that sell the most DSes gets the most Wiis"    This would be when Nintendo rewards the good DS sellers. I can imagine walking into toys r us and seeing 300 Wiis on Sunday morning(I have heard they are the best sellers of the DS, them and Best Buy)

The one wild card that I did not try to read is how many Wii's were produced before the Wii's launch, Nobody really knows so I did not want to get speculative with this. The numbers came out saying that Reggie is not full of BS without having to play with them ONCE!

Additions, subtractions, completions, and deletions would be appreciated-



psn- tokila

add me, the more the merrier.

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It's not clear whether the 1.8 million per month production started in August or September, at least according to the articles I've read. The bloomberg article about it states fiscal Q2 (ending in September) as the timeframe for increased production:

http://www.bloomberg.com/apps/news?pid=20601101&sid=a3FKYMLPMdoE

Let me warn you that people won't believe the stockpiling theories until the year is over, not even with the Wii having sold 600k per week for what, 3 weeks now?

 



My Mario Kart Wii friend code: 2707-1866-0957

@NJ5

Yea, that is why I left some space in my numbers. They are idiots if they do not believe the stockpiling is occuring. In the last 3 weeks alone Nintendo has sold around 1.9 million Wii's I guess we are gonna see 0 next week right?



psn- tokila

add me, the more the merrier.

Has there ever been a console that sold over a million units during one week? And if there was, was it the ps2? I would also like to point out that Europe might actually get more hardware as in France and the UK the Wii is becoming sparse, or so i heard at least.



Deep into the darkness pearing

Long i stood there

Wondering

Fearing

Doubting. 

Wii wins and Reggie gets a house made of gold



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DalekLord said:
Wii wins and Reggie gets a house made of gold

Yes but the question is how many s will it be?



To Each Man, Responsibility
NJ5 said:

It's not clear whether the 1.8 million per month production started in August or September, at least according to the articles I've read. The bloomberg article about it states fiscal Q2 (ending in September) as the timeframe for increased production:

http://www.bloomberg.com/apps/news?pid=20601101&sid=a3FKYMLPMdoE

Let me warn you that people won't believe the stockpiling theories until the year is over, not even with the Wii having sold 600k per week for what, 3 weeks now?

 


Maybe because Nintendo has repeatedly stated that there is no warehouse full of Wiis and they haven't been stockpiling.

The kind of stockpiling people were talking about was several million units. Even if they were just stockpiling from September to November, it would be about 700k/month which would be 2.1 million units. Those kinds of numbers that people were assuming in the past (other stated that they were stockpiling since July or earlier) would mean Nintendo would easily be selling a million per week, PLUS the extra units sitting on Japanese shelves because they hadn't been selling there.

If they sell 2.5 million in the first 30 days of December (~700k over production), there would still be no good evidence of stockpiling because Nintendo's factories could have been configured to put the Japanese firmware on that many units that didn't sell due to the months of slow Japanese Wii sales. Nintendo could have worked double-time to reflash the firmware in those units and sell them elsewhere, as well as halting the production of Japanese models and using existing stock to satisfy that region.

Frankly, we don't know what Nintendo's production rates have been, when they changed to what (except the 1.8 million number), how worldwide distribution has gone, etc. Nintendo stated many times that they were planning to increase production and many times that they'd had problems increasing production. The recent statements have been the best we've got so far.

George Harrison said

"Normally we would come into the October-November-December time period with a warehouse pretty well stocked with hardware, but we never were able to achieve that this year because we were shipping and selling everything that we received from overseas."

http://money.cnn.com/news/newsfeeds/articles/newstex/IBD-0001-21528100.htm

There are other Nintendo execs saying the same thing.  I think this is definitive evidence and hopefully the "Nintendo is stockpiling" and "Nintendo is creating demand by withholding Wiis" crowds.

Also from the article: " It takes Nintendo five months to increase production from the time it makes the decision to do so, Harrison says."

Consider that Nintendo can't adjust production for today's demand -- they have to adjust production for demand in five months.  So right when the Wii was released it is understandable that they waited a bit: would you spend a lot of money increasing manufacturing capacity five months into the future based on two months of selling out a new product?  You don't know what happens in those five months.



RolStoppable said:
George Harrison only said that they don't have a warehouse full of Wiis in America, they sold everything they received from overseas. So what if Nintendo does have warehouses full of Wiis in Asia and only recently sent them over?

Just teasing.

Oh come on, everybody knows they have warehouses full of Wiis in Canada. He said America as in USA, not including Canada. 



well considering Nintendo has production at 1.8 million per month, and we're currently selling at greater than 600k per week (ie, 2.4 million per month), those extra consoles have to come from somewhere.



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TheBigFatJ said:
NJ5 said:

It's not clear whether the 1.8 million per month production started in August or September, at least according to the articles I've read. The bloomberg article about it states fiscal Q2 (ending in September) as the timeframe for increased production:

http://www.bloomberg.com/apps/news?pid=20601101&sid=a3FKYMLPMdoE

Let me warn you that people won't believe the stockpiling theories until the year is over, not even with the Wii having sold 600k per week for what, 3 weeks now?

 


Maybe because Nintendo has repeatedly stated that there is no warehouse full of Wiis and they haven't been stockpiling.

The kind of stockpiling people were talking about was several million units. Even if they were just stockpiling from September to November, it would be about 700k/month which would be 2.1 million units. Those kinds of numbers that people were assuming in the past (other stated that they were stockpiling since July or earlier) would mean Nintendo would easily be selling a million per week, PLUS the extra units sitting on Japanese shelves because they hadn't been selling there.

If they sell 2.5 million in the first 30 days of December (~700k over production), there would still be no good evidence of stockpiling because Nintendo's factories could have been configured to put the Japanese firmware on that many units that didn't sell due to the months of slow Japanese Wii sales. Nintendo could have worked double-time to reflash the firmware in those units and sell them elsewhere, as well as halting the production of Japanese models and using existing stock to satisfy that region.

Frankly, we don't know what Nintendo's production rates have been, when they changed to what (except the 1.8 million number), how worldwide distribution has gone, etc. Nintendo stated many times that they were planning to increase production and many times that they'd had problems increasing production. The recent statements have been the best we've got so far.

George Harrison said

"Normally we would come into the October-November-December time period with a warehouse pretty well stocked with hardware, but we never were able to achieve that this year because we were shipping and selling everything that we received from overseas."

http://money.cnn.com/news/newsfeeds/articles/newstex/IBD-0001-21528100.htm

There are other Nintendo execs saying the same thing. I think this is definitive evidence and hopefully the "Nintendo is stockpiling" and "Nintendo is creating demand by withholding Wiis" crowds.

Also from the article: " It takes Nintendo five months to increase production from the time it makes the decision to do so, Harrison says."

Consider that Nintendo can't adjust production for today's demand -- they have to adjust production for demand in five months. So right when the Wii was released it is understandable that they waited a bit: would you spend a lot of money increasing manufacturing capacity five months into the future based on two months of selling out a new product? You don't know what happens in those five months.


You may have a point about the possibility of holiday-only increases in manufacturing. But frankly I don't care much about discussing whether the additional units were stockpiled or manufactured in a kind of holiday-only run. The effect is the same, the only difference being important only for Nintendo, so it's not something which should concern us. The point is that either way, supply during the holidays is bigger.

Regarding what Reggie said here, it's PR which seems to have a very specific meaning - they're not withdrawing Wiis in order to increase demand by creating an artificial shortage. It doesn't say that Wiis aren't being withheld to increase supply for the holiday season. Consider that the same person also said that they'd break their sales record in the week before Christmas, what does that tell you? They're increasing supply during that week, either by stockpiling or additional production or whatever has the same effect.

1.8 million per month is 414k per week, and we're seeing sales above that, which are likely to increase in the coming weeks. That's all I care about regarding this topic, the rest is speculation which only Nintendo could clarify.

 



My Mario Kart Wii friend code: 2707-1866-0957