The article is not talking about now, read it again. You'll see numerous instances of "may 2008" or before.

Of course, the article is still wrong today.

Touché! Of course it contradicts it, as it's based on nonsense, which was exactly my point. Bravo!

Which is precisely why I didn't address you directly in this sentence.

The OP is a bunch of carefully crafted MS shill BS. I say MS because even Sony doesn't put out so much BS. We can see that because in the handhed arena, you don't see articles upon articles trying to disparage the DS, even though the DS is "worse" than the Wii in every aspect attacked. And the sole difference is that MS is not in the handheld arena.

And they would make the most money in NA where they would sell it than in Europe where it would sit on the shelves longer if they flooded it.

Europe is not supply constrained and hasn't been for months so if in the 3 months where Nintendo sold 700k consoles in NA they had only shipped 200k in NA and an extra 500k in Europe they would not have made more money because those consoles would not have sold (as it is not supply constrained in Europe) and while retailers would have bought some of them to fill their shelves most of them would be sitting in Nintendo warehouses making them zero euros instead of making them $250 in the US. And while I am sure that Nintendo is stockpiling for this christmas they obviously do not do so at the detriment of selling shitloads every months in the US (even the week supply in the last few weeks should give them a 300-400k month at least which for august is bloody good).

Nintendo probably is shipping more in Europe right now because they seem to have increased the demand there (personally I blame Wii Fit for that) and it is their weakest market both historically and because of the PS3's success here while the US is in the summer lull but as soon as the ramp up to christmas starts I expect to see a much bigger supply in NA than in Europe (though still huge here).

If Nintendo really is prioritizing shipments to regions other than NA because of currency values, they're being damn short sighted and costing themselves money.

Nintendo isn't just making money off of console sales, they're making huge bank off of software sales, controllers and peripherals. The software attach rate of the Wii is highest in NA by almost 50% over Others and almost twice that of Japan, more than a large enough to compensate for currency shifts, I would guess.

Why would Nintendo throw away all those game sales?

You know at least one person will fall for that, right?

Yeah, Malstrom's posts are often bullcrap.

bdbdbd wrote:

"@Picko: So, what stupid did Malstrom write to his blog post? And what's the issue with the oil? What Malstrom wrote is excactly what's happening with oil right now.

No, it wasn't priced too low. With the Wiis pricing, it is able to go far without pricecuts and it will sell longer with the current price. The problem with PS360 pricecuts is, that people wait for them and buy their console either after the price goes down or their most anticipated game comes out (this is where you don't get additional software sales). After all, Nintendo wants to make profit with the software, not hardware. Besides, you don't profit from selling your product with price, you profit from cheap manufacturing."

Well first of all a large proportion of his argument comes from Nintendo denying what Pachter said. I'm sure we could come up with a list (numbered in the thousands) that detailed times when companies denied doing something that they were actually doing. Malstrom doesn't understand economics, which is rather important when commenting on the decisions that businesses make, and therefore Malstrom is naturally prone to saying stupid things. I would suggest that all gamers take anything and everything he says with a grain of salt. If we assume that it is difficult to increase production, they shifting shipments when the US dollar is weak is a rational and intelligent thing to do. It is how a responsible and business-savy firm would act.

As for oil prices, Nobel prize winning economists cannot agree on what exactly is happening in the oil market. I analyse the oil market myself and there's no clear evidence of what forces are driving the price decrease. Malstrom gives a straight answer, he doesn't clarify it in any way (he also doesn't mention the worldwide financial crisis or the worldwide slowdown in economic growth). As someone who knows better, I can't help but read his posts and shake my head. The guys knows next to nothing (he does however tell people what they like to hear).

As for whether the Wii was priced to low, the demand outstripped supply therefore the price was set too low. There is no debate to be had on that. Simple as that.

@Picko

So what your saying is that the obvious isn't obvious and that lizard men in cloaks, secret hand shakes and brotherhoods are the foundation of all logical go-to's? ^_^

Oil market? Malstrom only reffers on, social changes caused by economic pressure to support his arguement. That's all he said, he even went out and explained it in his supporting sentence. Also it's not fair to expect someone to explain every single aspect of every single situation that could possibly be relative when the person is only drawing an analogy, how you challenge credability through that I can't figure, mind explaining?

The Wii isn't a commodity in perfect competition. By your logic, all consoles should launch at highly inflated prices, since almost all of them are supply constrained for their first few months on the market. Manufacturers don't do that because it's bad business strategy for consumer electronics pricing to be that elastic.

Malstrom is talking about business strategy, not economics. They're related, sure, and I agree that knowledge of economics is an asset, but there are quite a few other factors at play here.

 Funny how in Australia the Wii is $400 and is still selling out and completly blowing away the competition. Then again the PS3 still costs $699 and that is outpacing the 360 on a weekly basis now and is on target to easily outsell the 360 down here this generation. I guess we Aussies are just used to being ripped off.

So basically, you're agreeing with Malstrom that every single one of the economy analysts that opened their mouth on the Wii to:

- call it a fad that would die soon

- put the Wii as last in the "console war"

are all stupid incompetent fools?

So it seems like you don't always shake your head at what he writes, as you're agreeing with him on this one.

The Wii sure enough is not priced too low, it doesn't work even in hindsight:

- Internet forums were and still are full of fools that cry that Wii is priced too high

- not a single one of the analysts ever said the Wii was priced too low

- Internet publications are still full of articles that say once the competitors reach Wii price, they'll sell like hot cakes

- some competitors are already lower priced than the Wii and despite that, sell far lower numbers than the Wii. What is that called? Selling abysmally too low?

- The Wii was initially set to launch at $200.

So the price may be too low for the job of "meeting demand with supply". Unfortunately, this is NOT the job of the Wii's price, so it's a moot point.

The job of the Wii's price is to acquire customers. It's doing that amazingly well.

Meeting the demand is the job of Nintendo and its manufacturers, it's not the job of the Wii's price.

Hence why Nintendo increase production instead of having a higher price, or even launch with a higher price.

@Picko: Ok, you can critisize, but what do you know about economics? As far as i know you haven't yet really proven that yourself.

And as dib8rman already said, Malstrom looked at the social situation. If you think he's wrong, you can go to any US car manufacturer, any flight company and tell them that their financial troubles isn't because of increased oil prices.
He also pointed out the relation of mass transport and high energy price.

Now, consider yourself as Iwata, you have supply constraints on your product and you need to decide what to do with the supply.
You have 3 big markets, one of them is a market where you have always done well, the other is a market where you have done atleast decently and the third one is a market, where you have always done bad. The third market is also the one, where competition is the hardest and now you have the best shot ever to win that market and make ground for your product. What will you do? Think where you get the best short-term profit when the company is already making record profits? Or do you do "long term investment" and try to breach that market?

In any case, despite North-America being smaller than Europe, NA is still getting bigger shipments. Can you tell me the reason? Is it because Nintendo makes more money there or because the demand is higher in NA?

You know, you said you understand economics, but do you understand the market?