TheBigFatJ said: ) It's a brilliant PR move to outsell the competitors during the holiday season. If they only had roughly 400,000 Wii's during november and 400,000 for december in NA, they would lose to both Sony and Microsoft. No, it isn't. >95% of people buying the Wii will not know that they outsold Sony and Microsoft. Even if they did, it isn't a big PR win because normal people don't care who sells more. They care about what they want. If it was such a great PR move to 'win' Christmas, why wouldn't MS make an artificial shortage now? That would be tantamount to what you're claiming makes sense in this case. I'm not sure why you are so convinced they aren't stockpiling. Losing another holiday to the 360 would be foolish. Why does it matter who sells the most in December? What about the rest of the year? How is it so valuable to hold the units back and ultimately sell fewer games, less accessories and stunt the total level fo demand by (1) not getting "the message" to the masses and (2) turning off customers who are actively looking now. It seems like people who think N is stockpiling will use anything to convince themselves it's true, regardless of how ridiculous each argument is. Nothing here is remotely convincing or even suggests Nintendo is stockpiling because none of it uses reasoning that makes business sense. You continue to look at a small idea and say, "this is why" when, in fact, that idea makes no sense in the grand scheme.

Wow, were you around for the Elmo dolls? There are plenty of examples of hot items selling out during the holidays and getting national press coverage.  In every case I can think of it drove the craze to even higher levels.  This is one of the reasons people have called the Wii a fad...As for your 95% number feel free to sight your source...

It matters the most in December because that is when the mass consumer is actually  paying attention. People are always looking for gifts for kids during the holidays and information about the latest video games is the type of info parents and grandparents are looking for.  I don't know if you even read my post or not but if you read it you would know it makes a lot more sense than your post which is essentially claims with no backup.  Just stating things doesn't mean anything...watch... "Cats like being punched.", "Dogs are made of pencils." .....hmm nope still not true.

 But I will help you and repeat myself one more time. 

People shopping for Wiis right now are less likely to give up and get another item/console than people who shop during X-mas BECAUSE they are not shopping for themselves and they are on a timer. 

Consoles sold as presents are more likely to be set up with lots of aunts and uncles around and as everyone has pointed out numerous times the Wii sells itself when people try it. 

Shortages during X-mas will reach the mass public, shortages during summer are a blip on the news radar. 

If you want to disagree with the impact of these reasonings that is fine, I won't go into that with you. But to say there is no reason to do this is just plain false.

Xyrax said: ckmlb said: To the people who mentioned the PS3 stockpiling, that is clearly no issue for someone who wants a PS3. To the people who mentioned it's good business you clearly didn't read my whole post. To the others who mentioned that they need them for the time that Mario and Smash Bros. are coming out, wouldn't the people who buy Wiis now who want those games get them then if they had the Wii from now? Also, there are a lot of people who don't have Wiis still and are actively looking for them. Are you gonna seriously try to convince me this is not the case? Your POV still doesn't hold up, unless you can show us proof that releasing whatever they have withheld thus far (which we are speculating on as is) would SATISFY THE DEMAND AND ALL OF THE CUSTOMERS CURRENTLY SEEKING THE CONSOLE. Otherwise your argument is basically saying this:   "Its better to give a few more consoles out now, and stop the lineups at my local store this month, than to satisfy those lines come later this year when they will be 3x as long due to increased demand for the holidays.   Someone summed it up perfectly ck, it doesnt matter if the systems were released now. All that would do is SCREW the consumers later this year expecting to go christmas shopping with the rest of the PLANET and pick up gifts for friends and family. BOTH situations some customers are going to get flat out screwed. Why? Because releasing them now, or during christmas doesnt matter, there wont BE ENOUGH. Selling 2m in August and selling 300k in December and November is in NO WAY better for the "consumer" than selling 300k in august and 1m in both Nov and Dec is. It is in NO way better. The end result is the same, some customers satisfied, others left out in the cold due to unprecedented demand this industry has never before seen. How about this Also, there are a lot of people who don't have Wiis still and are actively looking for them. Are you gonna seriously try to convince me this is not the case?   Are you going to try and convince ME that if those people actively searching now were relieved that they wouldn't be REPLACED by even MORE active seekers during the biggest retail and shopping season of the YEAR?   No you cant say that. Thats why I just feel your point is moot. Your arguing that moving the stock around would somehow be better for the consumers when it really wouldnt be. What it would do is partially satisfy now, and massively dissapoint later. There is a lesser of two evils here, the lesser just happens to ALSO make good business sense as well, thats why countless industries operate this way.

Implicit in his position is the sense that the Wii is a fad. If the Wii is like the PS2, obviously demand will continue for years at approximately the same pace -- even without sellouts. With the PS2, people who wanted the system, and got it, were replaced by people who wanted the system later on, and then got it later on.

Simple example, Ck: there were people who got a PS2 in March of this year. There were also people who got a PS2 in April of this year. Why didn't those April people get a PS2 in March instead, as there wasn't a shortage! Answer: because new people decided in April that they wanted a PS2, wheras in March they did not want one. Similarly, new people are deciding every day that they want to get a Wii.

Your model assumes that there's some given pool of people who want to buy the Wii, and that once those people have purchased it, it's done. This isn't the case.

I guess we're just going to have to wait and see whether Nintendo lying to us, as all of those who claim Nintendo is stockpiling are suggesting, or are they struggling to increase production, as Nintendo states.

People seem to assume that holiday sales are implicitly more valuable than sales any other time of the year. The fact of the matter is that a Wii sale today is worth more than a Wii sale in five months, and this is for a large variety of reasons. Two of the larger reasons follow:

(1) Wii sales are Nintendo's best method of advertising the system. You cannot play it in most stores and you cannot get a feel for it from commercials. Many people who Nintendo want to sell the system to don't even pay much attention to video game commercials because they feel those commercials do not apply to them.

(2) Wii sales now will lead to greater profits. You can speculate day and night about who Nintendo will sell units to, but Nintendo ultimately exists to create profit and, by law, they must make decisions that they believe will lead to the most profitability. A Wii sale now has the potential to affect video game sales -- someone who owns a Wii may buy several games before Christmas -- as well as accessory sales.

Because of point (1), withholding Wiis will potentially stunt demand. It is expensive for Nintendo to hold Wiis in a warehouse if they could otherwise be selling them. No one offered a compelling suggesting explaining how Nintendo 'winning' the holidays would lead to them making bigger profits. People have simply suggested that sales will magically appear during Christmas that wouldn't otherwise exist. Newsflash: Nintendo isn't having a shortage of potential buyers.

It seems most people here who believe in stockpiling are suggesting that Nintendo is putting away 300k-500k/month right now, and will unleash millions during the holiday season. How much does it cost Nintendo to store millions of Wiis? If they're holding back millions of Wiis, that's likely millions or possibly ~10 million of software sales *before* the holiday in addition to whatever happens during the holiday. The longer you can have someone playing your console, the more money you make.

Nintendo's sales right now are especially valuable because they're making an impression on third parties. Nearly every week third parties decide which platforms to start new game development on. Don't you think that if Nintendo could unleash an additional 100k units/week on the world wide market and catapult the Wii sales to nearly DS sales, it could affect their decisions and further strengthen Nintendo's market position?

The holiday season is revered as so important in the retail world because of the level of demand during that period. If your product sees that level of demand year-round, how important is the holiday season?

TheBigFatJ said: I guess we're just going to have to wait and see whether Nintendo lying to us, as all of those who claim Nintendo is stockpiling are suggesting, or are they struggling to increase production, as Nintendo states. People seem to assume that holiday sales are implicitly more valuable than sales any other time of the year. The fact of the matter is that a Wii sale today is worth more than a Wii sale in five months, and this is for a large variety of reasons. Two of the larger reasons follow: (1) Wii sales are Nintendo's best method of advertising the system. You cannot play it in most stores and you cannot get a feel for it from commercials. Many people who Nintendo want to sell the system to don't even pay much attention to video game commercials because they feel those commercials do not apply to them. (2) Wii sales now will lead to greater profits. You can speculate day and night about who Nintendo will sell units to, but Nintendo ultimately exists to create profit and, by law, they must make decisions that they believe will lead to the most profitability. A Wii sale now has the potential to affect video game sales -- someone who owns a Wii may buy several games before Christmas -- as well as accessory sales. Because of point (1), withholding Wiis will potentially stunt demand. It is expensive for Nintendo to hold Wiis in a warehouse if they could otherwise be selling them. No one offered a compelling suggesting explaining how Nintendo 'winning' the holidays would lead to them making bigger profits. People have simply suggested that sales will magically appear during Christmas that wouldn't otherwise exist. Newsflash: Nintendo isn't having a shortage of potential buyers. It seems most people here who believe in stockpiling are suggesting that Nintendo is putting away 300k-500k/month right now, and will unleash millions during the holiday season. How much does it cost Nintendo to store millions of Wiis? If they're holding back millions of Wiis, that's likely millions or possibly ~10 million of software sales *before* the holiday in addition to whatever happens during the holiday. The longer you can have someone playing your console, the more money you make. Nintendo's sales right now are especially valuable because they're making an impression on third parties. Nearly every week third parties decide which platforms to start new game development on. Don't you think that if Nintendo could unleash an additional 100k units/week on the world wide market and catapult the Wii sales to nearly DS sales, it could affect their decisions and further strengthen Nintendo's market position? The holiday season is revered as so important in the retail world because of the level of demand during that period. If your product sees that level of demand year-round, how important is the holiday season?

I don't think Nintendo is concerned about short-term profits here. As Sony keeps saying, "it's a 10-year lifecycle". Might not be 10 years for the Wii, but...

You aren't considering the PR perspective. Christmas is special, and Nintendo knows it.

Besides, are you really attempting to convince us that almost an year after launching the Wii, Nintendo won't have increased manufacturing at all since its launch?

 

ckmlb said: Please don't tell me Nintendo stockpiling Wiis for the holidays is for the good of the consumer lol. Tell that to the people who have been looking for Wiis for months or the ones that stood in line for hours months after launch or the ones buying them much more exspensively cause they are so rare (including me). Definitely looking out for the consumer by preventing said consumer from getting said console now and instead making him/her wait for the holidays because Nintendo wants big holiday numbers.

Let me ask a somewhat different question: When a store like Best Buy or Wal-Mart takes shipments they receive during the week, and puts them in the warehouse, stockpiling them until Sunday, is this not for the good of the consumer?  Should they immediately put them on store shelves the moment they arrive?  What if they stockpile for two weeks?  Three weeks?  At what point does it become bad for the consumer?

Some information on production from Nintendo as of late April:

http://www.afterdawn.com/news/archive/9533.cfm

Let's look at what this quote really tell us. It tell us that they've had about 1 million units per month January through March. Secondly, it tell us that they're increasing production so they can meet 14 million units in the 12 months following (April '07 through March '08). This suggests they will average less than 1.2 million per month. However, we don't know how exactly that would pan out -- would they continue producing 1 million per month and significantly increase their production to 1.5 million? This is far more likely than increasing production by 200k/units per month for business reasons, so chances are they were looking at increasing production quite a ways down the road.

More recently, Nintendo changed their projection to 16.5 million units in the same period. There are a few questions:

(1) Was Nintendo already planning to have sufficient capacity for that and are they simply surprised by the demand again? I'd say this is unlikely given the static and high nature of the demand.

(2) Did Nintendo plan on increasing production twice, have they already increased production and are they planning on doing so again?

(3) Did Nintendo determine or discover that they could increase production more than they anticipated when they increase production (assuming they haven't already), or did they possibly decide to be more aggressive with their upcoming production increase?

Personally, I believe #3 is the most likely case. Nintendo is likely trying to increase production. We don't really know what's happening behind the scenes, and we don't know how difficult it really is to increase production of an entire console.

Sony and Microsoft, who haven't been producing as many units of either the PS3 or the 360 as Nintendo has of the Wii, were both stunted by individual component production issues. This is *much* easier to resolve than entire product production and it still took them months. And both of them still missed their first fiscal year manufacturing goals.

TheBigFatJ said: I guess we're just going to have to wait and see whether Nintendo lying to us, as all of those who claim Nintendo is stockpiling are suggesting, or are they struggling to increase production, as Nintendo states. People seem to assume that holiday sales are implicitly more valuable than sales any other time of the year. The fact of the matter is that a Wii sale today is worth more than a Wii sale in five months, and this is for a large variety of reasons. Two of the larger reasons follow: (1) Wii sales are Nintendo's best method of advertising the system. You cannot play it in most stores and you cannot get a feel for it from commercials. Many people who Nintendo want to sell the system to don't even pay much attention to video game commercials because they feel those commercials do not apply to them. (2) Wii sales now will lead to greater profits. You can speculate day and night about who Nintendo will sell units to, but Nintendo ultimately exists to create profit and, by law, they must make decisions that they believe will lead to the most profitability. A Wii sale now has the potential to affect video game sales -- someone who owns a Wii may buy several games before Christmas -- as well as accessory sales. Because of point (1), withholding Wiis will potentially stunt demand. It is expensive for Nintendo to hold Wiis in a warehouse if they could otherwise be selling them. No one offered a compelling suggesting explaining how Nintendo 'winning' the holidays would lead to them making bigger profits. People have simply suggested that sales will magically appear during Christmas that wouldn't otherwise exist. Newsflash: Nintendo isn't having a shortage of potential buyers. It seems most people here who believe in stockpiling are suggesting that Nintendo is putting away 300k-500k/month right now, and will unleash millions during the holiday season. How much does it cost Nintendo to store millions of Wiis? If they're holding back millions of Wiis, that's likely millions or possibly ~10 million of software sales *before* the holiday in addition to whatever happens during the holiday. The longer you can have someone playing your console, the more money you make. Nintendo's sales right now are especially valuable because they're making an impression on third parties. Nearly every week third parties decide which platforms to start new game development on. Don't you think that if Nintendo could unleash an additional 100k units/week on the world wide market and catapult the Wii sales to nearly DS sales, it could affect their decisions and further strengthen Nintendo's market position? The holiday season is revered as so important in the retail world because of the level of demand during that period. If your product sees that level of demand year-round, how important is the holiday season?

 *sigh*  You don't have much background in economics or marketing, do you?

This is basic ideas stemming from both of those fields.

 

A. The cost of stockpiling a million Wii's is minimal.   They already own the warehoiuse, they already pay the operating staff, all overhead is already calculated into their annual figures.   

B. Advertising via the media.  An increase in 50k units per week (or month) at this point would gain Nintendo very little new adverstising in the media regarding its sales rate.   But a massive sales spike during the Xmas season will gain Nintendo a media blowout that cannot be purchased.  What was 50k in additional sales last summer will be 100k in additional sales next summer because of the hype generated over Xmas.

C. You've completely forgotten about developers and publishers.  Most games are sold in the 4th quarter.   When do you think they want Nintneo to relase all those consoles?  The holidays.  It goes beyond that as well.  The same perception given to consumers that Nintendo had a sominating holdiay will be impressioned onto devs/pubs as well.  This leads to even more 3rd party support and obviously more and better games.  No more third string dev teams or outsourcing to Tose.

 

 

 

 

 

TheBigFatJ said: The holiday season is revered as so important in the retail world because of the level of demand during that period. If your product sees that level of demand year-round, how important is the holiday season?

The problem with this argument is that the Wii doesn't see the same level of demand right now as it will during the holidays.

Customers have varying levels of devotion.  Some are going to buy a Wii no matter what, others are going to buy one for their kid for Christmas.  Their kid does not have the ability to buy a Wii right now.  The parents do, but they aren't going to spoil him by buying him whatever he wants whenever he wants it.  It's not just parents, either.  People get gift cards and spend them on consoles and games.  In short, demand during the Christmas season will be far higher.

If there aren't enough Wiis available at Christmas, some of the people who wanted to buy one at Christmas won't buy one after Christmas.  The devoted customers who want one right now will still want one after Christmas.  It is a better business decision to satisfy as much of the "demand spike" as possible, since that demand isn't going to stick around for the next 10 months.

Obviously it would be even better to have a massive production increase during the holiday season, but factories just don't work like that, and you can't just snap your fingers and order a "short" manufacturing run of 5 million extra units.  The alternative is to stockpile.

Why are some of you acting like stockpiling is an evil thing? Do you not realize that MS and Sony also stockpile consoles?

Do you not realize that every electronic manufacturer on the planet stockpiles for Xmas?

Viper1 said: Why are some of you acting like stockpiling is an evil thing? Do you not realize that MS and Sony also stockpile consoles? Do you not realize that every electronic manufacturer on the planet stockpiles for Xmas?

Actually they're attacking a different thing, which is the action of stockpiling despite demand already being bigger than supply before Christmas.

But they obviously fail at giving good arguments for that attack, as several people here have proven. Besides, reality disagrees with them, as there are several pieces of evidence for Wiis being currently stockpiled.