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Forums - Nintendo - How is the Wii Hardware shortage? Xmas predictions

Sqrl on 14 September 2007

Hopefully more people will believe what I said here....

http://vgchartz.com/forum/thread.php?id=4860

X-mas will ultimately tell how much supply they get but it should be clear now regardless.

Anyways, about the reasons to stockpile:

- Stores would stockpile to have supply to bring people into the store to gift shop during X-mas.
- Nintendo would stockpile because during X-mas there is a very large market that will only buy Wii's during X-mas, so a Wii not sold now is likely still a wii sold later, but a Wii not sold during X-mas is possibly a Wii never sold.
- "Winning" the holidays is not just a fun thing for them to say it gives PR, it makes them desirable from a consumer appeal standpoint, and most of all third party developers like to sell lots of games at X-mas so a console kicking ass at X-mas is a console you want to release on during X-mas.

Lots of other reasons I am sure but that should give you the idea.
To Each Man, Responsibility
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z64dan on 14 September 2007

Agreed Sqrl. Nintendo knows that around 50% of retail sales happens in ONLY november-december. They will want to try to get as many consoles out there as possible to quench the Wii thirst during the holidays.

After all, if people cant quench their Wii thirst, they might just go with the price-cut-kings 360 and PS3.



Sqrl on 14 September 2007
reverie said:
kn,
I'm with you, but many people here just prefer to believe in stockpiling. There's no business argument or evidence from fiscal reports that can convince them of the opposite.

Regarding Wii shipments - after 2.6 million units in the 1st quarter of 2007 (calendar quarter) and 3.4 millio units in the 2nd quarter I still think Nintendo will ship above 4 million units in this quarter and 4.5 to 5 million in the Holiday quarter. There will be windows of higher Wii availability, first in the US (possibly around November), then in Japan (more like December), but they won't be open for long. Europe is not sold out now and probably won't sell out this year. Then another 4.5 million units in the 1st quarter of 2008 should finally fill the store shelves.

 Thats actually the position you are in.  There is plenty of business logic to stockpiling, and all of the financial reports point to stockpiling, the statements from nintendo point to stockpiling, past consoles in similar positions point to stockpiling, and we even have reports that state there were already 9 million Wii's produced before 2007 even started.... which points to stockpiling...

So explain again how any of that makes you think we are some how stretching to believe in stockpiling. 

@z64dan, 

Yup, and its not just Nintendo that understands the huge sales spike that is X-mas, those third party developers know it too and they want their games coming out on consoles that are "RED HOT!".
To Each Man, Responsibility
reverie on 15 September 2007

FishyJoe,
The interview confirms that they are increasing shipments. It says "for" the holdays, which is the whole time between now and Christmas. Shipments will go up steadily month by month, but they won't multiply from one day to the next.


edit:
I've watched the whole video now, and nowhere does Reggie say that they are holding back systems.

"we're flowing more and more product into the marketplace"

Do you see the continuous form? That means now, not later! They are increasing monthly shipments, coming from a low of 700k in February they are at maybe 1.3 million now and will have to go up above 1.5 million for the holidays, then stick around 1.5 million for 2008 and wait and see if another increase will be necessary for Holiday 08. Nobody ever doubted that Nintendo have to increase shipments. They have inreased shipments every single month since February and I see no reason to believe that they will stop increasing shipments in the 3 months just to make a splash in December.

Well, I shouldn't haven gotten into this fight. I have learned that people just want to believe in Nintendo holding back shipments for November/December even though there is no prove for that in actual shipment numbers or business logic. My interest will lie in the financial reports coming from Nintendo in October and January.

And I'm already prepared to see people confusing sold-to-retail and sold-to-consumers again, because those two number have been the same for the Wii for the last 9 months. I'm prepared to hear people telling me that NPD December data is proof for Nintendo stockpiling...


Hardcore gaming is a bubble economy blown up by Microsoft's $7 $6 billion losses.

reverie on 15 September 2007
GotchayeX said:
When do we next get quarterly financial reports? October?

The last one released by Nintendo projected a much larger number of shipped units by the end of '07 than current shipping trends can account for, and Nintendo tends to be conservative. Unless production was going to jump to about 2-3m per month, they've been stockpiling or they were making impossible projections.

If that seems impossible in your head, why don't you use a calculator? Nintendo want to ship 16 million units this business year (April to March), and they can do that without a problem. Here, I'll give you an example:

June quarter: 3.4 million (this is confirmed, not my speculation)

September quarter: 3.8 million (this is where my example prediction starts)

December quarter: 4.3 million

March quarter: 4.5 million

Wow, is that 16 million already? Surprising. This business year has still 6.5 months to go, and monthly shipments of 1.5 million units per month would be enough for Nintendo to hit their forecast.



Hardcore gaming is a bubble economy blown up by Microsoft's $7 $6 billion losses.

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reverie on 15 September 2007
Sqrl said:

 Thats actually the position you are in.  There is plenty of business logic to stockpiling, and all of the financial reports point to stockpiling, the statements from nintendo point to stockpiling, past consoles in similar positions point to stockpiling, and we even have reports that state there were already 9 million Wii's produced before 2007 even started.... which points to stockpiling...

So explain again how any of that makes you think we are some how stretching to believe in stockpiling. 

@z64dan, 

Yup, and its not just Nintendo that understands the huge sales spike that is X-mas, those third party developers know it too and they want their games coming out on consoles that are "RED HOT!".


Financial reports: Which do you refer to? Nintendo had a 30 % shipment increase in the last quarter.

9 million Wiis: Where did you read that? And if you think the Holidays are a good time to stockpile for, why didn't they ship more Wiis for Holiday 06? Why didn't they sell 5 million Wii's last Christmas, can you tell me that? Are you suggesting it's worth for Nintendo to keep product in store for more than one year? Why not keep it for Holiday 08 or 09 then?

Past consoles: Which consoles were held back from the market on purpose? As far as I can see most companies in this business had to fold because they could not sell enough.

Statements from Nintendo: Fils-Aime said that they will ship Wiis at the highest level ever. That does point to production increasements, but not to stockpiling.

Edit: Regarding that "RED HOT" statement - this sounds like the Macho executive that has been mentioned in one article posted here a few days ago. Businesses don't prosper on the size of their executives' egos. If Nintendo had 2 million Wiis in stock now, and they sold it right now instead of Christmas, they could not only sell the same amount of games on Christmas, but also more games now. They would lose several 100k of game sales between now and Christmas, and they would lose millions of $ on interest because stock that doesn't move and doesn't increase in value (remember, no price increase for the Wii in sight) is dead capital.



Hardcore gaming is a bubble economy blown up by Microsoft's $7 $6 billion losses.

z64dan on 15 September 2007
reverie said:
Sqrl said:

 Thats actually the position you are in.  There is plenty of business logic to stockpiling, and all of the financial reports point to stockpiling, the statements from nintendo point to stockpiling, past consoles in similar positions point to stockpiling, and we even have reports that state there were already 9 million Wii's produced before 2007 even started.... which points to stockpiling...

So explain again how any of that makes you think we are some how stretching to believe in stockpiling. 

@z64dan, 

Yup, and its not just Nintendo that understands the huge sales spike that is X-mas, those third party developers know it too and they want their games coming out on consoles that are "RED HOT!".


Financial reports: Which do you refer to? Nintendo had a 30 % shipment increase in the last quarter.

9 million Wiis: Where did you read that? And if you think the Holidays are a good time to stockpile for, why didn't they ship more Wiis for Holiday 06? Why didn't they sell 5 million Wii's last Christmas, can you tell me that? Are you suggesting it's worth for Nintendo to keep product in store for more than one year? Why not keep it for Holiday 08 or 09 then?

Past consoles: Which consoles were held back from the market on purpose? As far as I can see most companies in this business had to fold because they could not sell enough.

Statements from Nintendo: Fils-Aime said that they will ship Wiis at the highest level ever. That does point to production increasements, but not to stockpiling.

Edit: Regarding that "RED HOT" statement - this sounds like the Macho executive that has been mentioned in one article posted here a few days ago. Businesses don't prosper on the size of their executives' egos. If Nintendo had 2 million Wiis in stock now, and they sold it right now instead of Christmas, they could not only sell the same amount of games on Christmas, but also more games now. They would lose several 100k of game sales between now and Christmas, and they would lose millions of $ on interest because stock that doesn't move and doesn't increase in value (remember, no price increase for the Wii in sight) is dead capital.


Nintendo knows that the OTHER consoles aren't selling that well right now. The OTHER consoles will sell VERY well during christmas, if there are no Wiis available during that time.



ookaze on 15 September 2007

I'm all with reverie here.
To me, this stockpiling nonsense have been debunked already, by the Japan vacations, where they couldn't sell a lot more. And by the DS. They never stockpiled the DS, which would have been easier and less nonsense than stockpiling the Wii. They still had shortages at Christmas.
I hope for the Wii that it will be the same.



http://www.backloggery.com/main.php?user=ookaze

reverie on 15 September 2007
z64dan said:

Nintendo knows that the OTHER consoles aren't selling that well right now. The OTHER consoles will sell VERY well during christmas, if there are no Wiis available during that time.


 Last time I checked Wii Sports was still an exclusive. I think 80 % of the people interested in a Wii would not buy a PS3 or 360 instead. There is too much of a difference in features, software and price.



Hardcore gaming is a bubble economy blown up by Microsoft's $7 $6 billion losses.

Untamoi on 15 September 2007
ookaze said:
I'm all with reverie here.
To me, this stockpiling nonsense have been debunked already, by the Japan vacations, where they couldn't sell a lot more. And by the DS. They never stockpiled the DS, which would have been easier and less nonsense than stockpiling the Wii. They still had shortages at Christmas.
I hope for the Wii that it will be the same.

 In USA DS sales more than tripled during holidays in 2006. Did they just triple the production that year in USA (and only in USA)? Same thing happened in Japan during 2005 holidays but not in 2006. You can check this easily from the charts.

Anyway, you don't have to stockpile if you are allready dominating the market with large margin. But if you are not dominating or have just small lead in sales you have to stockpile for holidays. This is why they didn't stockpile in Japan last year but moved the stockpiled units to USA to win that market.