So here is the 'Tard of the Week of 1/7:
http://www.technewsworld.com/story/61065.html?welcome=1199847979
What the 'tard has to say:
"There are two mistakes a vendor can make that it may not be able to recover from. One is to build too many products, which stay in inventory and prevent future sales; and the other is to have too few products and lose out of sales as a result.
Nintendo did the latter, and that will be a problem for the company in 2008.... Nintendo Screws Up
It was clear that the Wii was going to be the hot product for the fourth quarter, and as we entered the holiday buying season, it was selling at a significant premium. Game systems are based on the razor/blade model in that the vendors subsidize the game console to get an annuity of game royalties, which is where they derive their profits.
The Wii subsidy is believed to be -- when compared to Sony -- almost insignificant, so Nintendo should have been able to sell millions. Due to manufacturing shortages, it didn't even sell 1 million units.
Anecdotal data suggests that Sony may, in terms of sell-through, have benefited more from this than Microsoft did -- probably because the Sony PS3 was seen as newer and more exclusive.
Whenever your most focused competitor gains because you screwed up, it isn't a good thing, and Nintendo doesn't have the scale of either Sony or Microsoft to bury this kind of a mistake in revenue from other units.
This was a classic miss and, based on demand, Nintendo lost between 60 and 75 percent of the available business, most of which will likely not return because kids want something during the holidays -- and IOUs just don't cut it.The Nintendo DS System actually outsold both the hotter Wii and the Sony's PSP because it was not constrained. Apparently, it also outsold both the Xbox and PS3 as well (once again pointing out that $200 is the magic break point for high volumes, and the lower you get, the faster sales volume comes up).
Had Nintendo been able to meet demand, it would have ended the year so far ahead of the other players that it could have dominated the console and handheld game player market. However, by missing, everyone stays in the game. This is going to hurt in 2008 as the other folks bring their prices in line with the market."
Why he's a 'tard:
Where to start? "The Wii subsidy is believed to be -- when compared to Sony -- almost insignificant..." Uh, it's public knowledge that Nintendo actually makes money on each console sold. So there is no 'subsidy'.
"Due to manufacturing shortages, it didn't even sell 1 million units." Huh? What period of time is this fool talking about? The only time period he mentioned in the article is the fourth quarter. And we all know that Nintendo actually sold well over 1M during the three months at the end of 2007. Before pulling numbers out of your ass, Rob, let us know where you got them from, eh?
"Nintendo doesn't have the scale of either Sony or Microsoft to bury this kind of a mistake in revenue from other units." Except for their handheld sales because the DS basically prints money.
"...and IOUs just don't cut it." Really? Because Gamestop seemed to do brisk sales of Wii rainchecks right before the end of the holiday shopping season.
"The Nintendo DS System actually outsold both the hotter Wii and the Sony's PSP because it was not constrained." Mostly true, but many stores started to run out of systems (and same are still out) right before Christmas.
"Had Nintendo been able to meet demand, it would have ended the year so far ahead of the other players that it could have dominated the console and handheld game player market. However, by missing, everyone stays in the game. This is going to hurt in 2008 as the other folks bring their prices in line with the market." (sigh) Yes, if Nintendo would have been able to make millions more, they would have sold quite well. Would such sales have forced MS or Sony out of the marketplace? No. I think this guy really doesn't get the whole 'Blue Ocean' strategy. You can't go buy a 360 or PS3 and get the same experience no matter how much those systems cost. Nintendo has the momentum, mind share, and software to stay on top in 2008. And no price drop by MS or Sony is going to stop that at this point.
Numbers are like people. Torture them enough and you can get them to say anything you want.
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