What's Nintendo doing?

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Technoob

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With the 360, the ps3, and even the wii, people always said things during release like "they're creating false shortages to create higher demand." I think those theories were pretty silly personally.

However, does anyone think that at this point Nintendo might be doing it with the Wii now? Just look at the DS lite, been out for a long time now, and it's damn tough to find one still. A big release with tons of units on the wii, combined with now over a month later where you can't find one anywhere, and no steady stream of consoles, is this strategy to maintain the buzz?

Each week there's a big "omg the stores will have some wiis on sunday" excitement.

I don't necessarily believe that this is the case, but it makes one curious...with the demand as it is, you'd think they'd be pumping out millions of wiis and ds lites, but the supplies just aren't coming. And the dslite as pointed out is an item on the market a LONG time now.
 
Dunno about Wii's but DS's are pretty expensive here. So we have someone abroad order it for us and ship it here. It's a common practice and i suppose it adds to your shortages :D
 
I don't think Nintendo could have predicted the Wii's popularity. If you asked people 4 months ago, I bet they would never have imagined that people would be waiting for Wii's at this time.

Speeding up factory processes would probably result in more faulty units / less quality control. Making more factories would take a long time and if demand ceases, they've wasted money there.
 
I guess we'll have to see if they ramp up production any quicker. They sure aren't doing it with the DS though. Those are still impossible to find, and its a handheld.
 
It's not an artificial shortage...they're just selling that fast. They're both ridiculously popular. You can't just flip a switch and go from 3 million a month to 10 million a month.
 
Most products (yes even technology) ramp up production in the face of such huge demand. Remember, the fact that you can't find one doesn't necessarily mean there is a huge stream of supply and they're bought out the instant they come in. Demand can be high along with, and because of shortages, artificial or no.
 
You could argue that the decreased availability creates more mind share, and more demand. Less people would be excited about the Wii if it was easy to get. The Wii isn't exactly expensive or difficult to produce.

That being said, only so many can be made at a time. Eventually, the demand will decrease as more people get a hold of them, whether Nintendo likes it or not.
 
Nintendo already increased their production to one million units per month (source) because demand was so much larger than they had anticipated.

In my opinion the buzz is already here with all the press coverage and positive reviews the Wii has recieved; hell, the best advertising available for the system (as I think a lot of Wii owners realized) was during the holidays when people brought the systems home for their family and friends to play.

Nintendo would like to get as many units available as they possibly can because there are a lot of people who would like to purchase the system that aren't willing to camp out at a store overnight just to secure one. Nintendo, just as any company, would love you just be able to magically increase production by a few million more units, but there is only so much capital (workers, factories, etc.) that they have to do it with.
 
The Wii has sold almost 5 million units in less than 3 months.

The DS outsells most other consoles *combined*. They're selling millions of them a *month*.

People are buying these things at an absolutely obscene rate.

Think about it for a minute.

For as long as the DS Lite has been out, they've been selling *millions* every god damned month. They sold 1.6 million in December and 916,000 in November. They had sold over 6 million DS Lites in *three months*.

That's not a false shortage. They're *printing money* with these game systems. They are producing millions upon millions of these things and still can't keep them on the shelves.
 
It is absolutly ludacris to believe that a company is holding off supply to keep demand high. for a company in Nintendo's position to do that would only hurt their profits which is what making a product is all about. They don't make video games because they love them (well maybe a little bit), they make video games because they can amke alot of money on it. While I understand what you are thinking, your logic is slightly flawed because there are people lining up to pay nintendo 250 still. It is in Nintendo's best interest to sell as many units as possible. Not only does it bring more revenue in, but games is what you make money on and the more systems out there, the more games you can sell.
 
xFROSTx said:
It is absolutly ludacris to believe that a company is holding off supply to keep demand high. for a company in Nintendo's position to do that would only hurt their profits which is what making a product is all about. .
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As I pointed out before, I don't think they're doing this, but restricting supply does in fact create demand, and in turn stories on how "omg everyone wants one" creates hype and demand. That's called marketing. See the insane spectacle of Tickle Me Elmo and like toys.
 
Technoob said:
As I pointed out before, I don't think they're doing this, but restricting supply does in fact create demand, and in turn stories on how "omg everyone wants one" creates hype and demand. That's called marketing. See the insane spectacle of Tickle Me Elmo and like toys.
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Like I said, I understand what you are saying, but it would be counter productive in this situation. On items where you pay for the prestige or rarity of the item this would be a viable option. For Nintendo though, they gain pratically nothing by having this high of demand. It doesn't matter if they have 20 or 200 people outside the store waiting for them, they are only going to make 250 per unit sold so it would be in their best interest to sell as many as possible. Now, if we were talking about say a Ferrari, where the prestige and rarity of that car is a part of what you are buying, then yes, limiting supply would increase demand and value of the car. Basically, even with the stories of how hard they are to get, Nintendo doesn't gain much by limiting their supply.
 
I'm surprised no one's mentioned it yet, but it's also worth noting that Nintendo's not just feeding one or two regions like other manufacturers (*cough*Sony*cough*), they're feeding the whole civilized world's markets, from Japan to the US/Canada, Europe and the UK, Australia, etc. That's a lot of territory to cover with just a million units a month. Given that they've already nailed close to 5 million units in under three months, I'd have to say they're doing *beyond* well. To say that they're performing above expectations would be the understatement of the year.

I dunno what the magical formula Nintendo found is composed of, but one thing is crystal clear: It *works*.
 
Technoob said:
Most products (yes even technology) ramp up production in the face of such huge demand. Remember, the fact that you can't find one doesn't necessarily mean there is a huge stream of supply and they're bought out the instant they come in. Demand can be high along with, and because of shortages, artificial or no.
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Most of the time, that would be true; it's not this time. There are still people lining up for this thing three months after the fact. The reality is that the demand is huge.

As was mentioned earlier, they gain nothing by limiting supply now. They have the hype; they just don't have enough machines to satiate it.
 
UnlimitedMP, B.W., DragonMaster Alex, and K600 hit it right on the head here.

Wiis and DSes are flying off shelves not just in the U.S., but all over the world. Take into consideration that they ship to many countries to many continents worldwide, not just a few regions like the U.S., Canada, and Japan like Microsoft/Sony tend to do, they ship to much, much more countries, which means they have to produce even more units then they ship to the U.S.

The question is not "Why is Nintendo limiting supply on Wiis", it's "Can Nintendo produce enough Wiis in a month to satiate all their markets?". Remember that they ship Wiis to many, many regions, so it may be possible that their production factories simply cannot pump out enough units in a month to have ample supply of Wiis to all their regions.

Nintendo could increase production, but that's not as easy as it sounds. They have to hire more workers and possibly build new factories. Let's say they build 2 new factories to accomodate the Wii's/DS's demand, and they triple the number of units the produce a month. Over the next few months, more and more people will own a Wii, and less and less people will be waiting in line to get one. Pretty soon, you'll see Wiis on the shelves wherever you go, regardless of whether they were just stocked or not. That would mean that those 2 factories are now useless.

Nintendo is playing it smart here: they've created a new console that's innovative and sought after by people of all ages, slapped a low price tag on it, but doesn't send all of their units they've produced to the U.S. every month.



Think about it.
 
Nintendo doesn't have to build new factories, there aren't nintendo industry factories pounding these out. The components are assembled in china, malaysia, and so on by contract.
 
If you still can't wrap your head around the concept that it would be market suicide to "fake" artificial demand on Nintendo's end, read this:

http://www.vgcats.com/comics/?strip_id=212

It's a fact. People want Wii. People want DS Lite.

Luckilly where I live, the DS Lite is in good supply, but for the most part, they do get sold out and luckilly restocked in a timely manner.

As for the Wii, I haven't seen anywhere where there's stock that lasts more than an hour. It's bought by people as soon as it gets there. There are still people braving the cold mornings hoping to get in at opening to see if a Wii is in stock.

This isn't the time anymore for artificial demand. We're in Feb. People aren't browsing the malls for x-mas presents, most are looking at Valentine's day stuff. People want the system because they've played it at friends houses. They've seen it in action. They've tried it and liked it. Nintendo sells what it makes every month. It's a great time to be a Nintendo employee...
 
There is no denying that when something is more difficult to find, it adds a certain cache to the product. Although Nintendo is not artificially increasing demand, I don't think they are ramping up production as much as is possible. It would be better for them to fill out this demand at a constant rate, and have it remain as a sought after item than to flood the market with consoles and dampening demand too much.

If there were tons of Nintendos on store shelves everywhere, there would be less excitement about the console. Shortages make people pay attention. People also want what they can't have. And there are a bunch of people in line every time just itching to get home and thrown their wii on ebay.
 
OutOfGum said:
There is no denying that when something is more difficult to find, it adds a certain cache to the product. Although Nintendo is not artificially increasing demand, I don't think they are ramping up production as much as is possible. It would be better for them to fill out this demand at a constant rate, and have it remain as a sought after item than to flood the market with consoles and dampening demand too much.

If there were tons of Nintendos on store shelves everywhere, there would be less excitement about the console. Shortages make people pay attention. People also want what they can't have. And there are a bunch of people in line every time just itching to get home and thrown their wii on ebay.
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They're already making/shipping probably 1.5 - 2.5 million DS Lites a month, coupled with the apparently 1+ million Wiis (gotta hit their 6 million mark for March), and they still make the GBA SP, so I think they're working at pretty good capacity. Nintendo doesn't add new plants because it would be an unwise investment due to startup time, costs, and the eventual dying down of the fervor. Of course, they could cut down quality assurance time, if you'd like them to do that, and produce more.
 
I read the title of this thread:

"What's Nintendo doing?"

And my answer is:

"Eating money for breakfast, lunch, and dinner because, if they do not, they will drown in it."
 
If they're producing 2 million ds's per month, thats a ds sold every 1.29 seconds right? Meaning that it's pretty questionable that they're creating artificial demand.
 
I'll tell you why they're selling out, no matter how fast they build them.

Last Sunday my retired father came over to pick us up for snowboarding. We had lucked out and found a Wii, and wanted him to try it out before we took off. As soon as we handed him the remote and started bowling, he started grinning and didn't stop all the way through two holes of golf, some boxing, and a demo of Elebits. He was stunned by the web browser and the weather channel. Through the whole thing he needed only a second or two of instruction before he played each game. In fact, he beat me at boxing... As we headed out he said, "We spent all December trying to find one for you guys, but now I'm thinking your Mom and I may need to get one for us."

When my Mom found out we had a Wii, she told us we would be bringing it over the next time we visited. Almost every one of my friends reacted with dismay that we had found a Wii, and were desperately trying to find someplace that had one. My co-worker sold his PS3 and is saving the money to get a Wii. Another co-worker said the following: "I would never have bought a Wii, until I tried it at a friend's house. Now I would kill a man to get one."

Nintendo is definitely onto something here. The graphics aren't "next-gen", but the controls sure are. They just need to get some depth to the number and variety of titles offered on the console. For now though, I think they may be destined to have exactly the sort of penetration into "non-gaming" households they were hoping for, and because of that, they're going to keep selling Wiis like crazy.
 
Indeed Scapel, I think Nintendo is really on something, the wii's graphics might not be amazing, but they are sufficient and the wiimote really does add some new elements to the gameplay.
 
Nintendo definitely has the foundation to really make a huge impact, but you have to question how long can Nintendo ride the wave of hype. I discuss this every so often with a good friend, and we both have our opinions. But what we both agree on is this...

Strong initial sales and word of mouth advertising will slow down - it's inevitable that the Wii's hype will die out. When this happens, hopefully several of things would've happened or are in the works: 1) Nintendo has an installed based that is biting on the heels of the 360, which leads to 2) persuading developers/publishers to dedicate more resources to a take their piece of the pie.

Games for the Wii need to be developed with the Wii as the main focus. Games like Splinter Cell, Call of Duty, and a few others are great ports But it becomes hard to compete when its 360/PS3 counterpart offer better graphics and online play. What the Wii needs are games that the DS thrived on: Nintendogs, Brain Academy, etc.

Current games like Rayman, Monkey Ball, and Wario Ware really show how effective the controller can be. Now the Wii needs more developers to follow this lead and push out more AA games for the system. The Wii will lose its push if it reverts back to it's GC like lineup of game releases and support.
 
From a manufacturing standpoint they already missed thier "window" to have enough supply for the demand. By the time they get additional factories up and running, the demand may be weaker- leading to lower profits due to higher operating costs. I doubt even nintendo's experts could have predicted the amount of ass-kicking they would be doing right now.

I dont think it will fall off anytime soon since Nintendo may have opened up huge parts of the gaming market that microsoft and sony can only dream of getting thier hands on. My guess is that they are bringing new facilites online, which may or may not hurt their bottom line depending if they can keep selling this thing at stupid rates.
 
ghostchamber said:
I thought holding back production to increase demand was a standard business practice.
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I can't remember anything from my micro/macro economics classes. But I thought the whole supply & demand concept worked on a non-fixed price.
 
i don't know why ya'll keep talking about nintendo opening factories.... they don't have any to begin with, they contract the work out to other companies, much like nvidia and amd/ati use usmc, tsmc, chatered semiconductor, etc.
 
Denki said:
i don't know why ya'll keep talking about nintendo opening factories.... they don't have any to begin with, they contract the work out to other companies, much like nvidia and amd/ati use usmc, tsmc, chatered semiconductor, etc.
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Exactly. Nintendo doesn't have, nor do they open factories folks.
 
MarvynDT said:
Nintendo definitely has the foundation to really make a huge impact, but you have to question how long can Nintendo ride the wave of hype. I discuss this every so often with a good friend, and we both have our opinions. But what we both agree on is this...

Strong initial sales and word of mouth advertising will slow down - it's inevitable that the Wii's hype will die out. When this happens, hopefully several of things would've happened or are in the works: 1) Nintendo has an installed based that is biting on the heels of the 360, which leads to 2) persuading developers/publishers to dedicate more resources to a take their piece of the pie.

Games for the Wii need to be developed with the Wii as the main focus. Games like Splinter Cell, Call of Duty, and a few others are great ports But it becomes hard to compete when its 360/PS3 counterpart offer better graphics and online play. What the Wii needs are games that the DS thrived on: Nintendogs, Brain Academy, etc.

Current games like Rayman, Monkey Ball, and Wario Ware really show how effective the controller can be. Now the Wii needs more developers to follow this lead and push out more AA games for the system. The Wii will lose its push if it reverts back to it's GC like lineup of game releases and support.
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Exactly. Of course demand isn't going to stay this high forever, but it is definatly giving Nintendo the market share it needs to lure game developers over. It has been mentioned before in this thread, but my biggest suprise is how much *everyone* loves it. I bought one a couple weeks ago and my mom, girlfriend and my dad all love it and constantly want to play it. My parents and girlfriend never have liked video games and I would call myself a casual gamer at best. Nintendo is scoring here because they realize that not everyone wants a game that takes them 100 hours to beat. WOW is a great game, but not everyone has the time or patience for that game. Nintendo has noticed that there is a huge market of people who only like to play video games for a couple hours a week or so and thats where the wii is striking gold. High end graphics are great and we all know hi-def is the future. Sony and microsoft missed the boat a little here because they didn't stop to think that alot of people don't have/can't afford a high def tv and the fact that games don't have to be full of eye candy to still be fun. To be honest, the Wii reminds me of the original NES a little. The graphics were great, the games weren't exactly very deep, but damnit, they were alot of fun. Nintendos fate lies in the hope that they can keep comming out with fun games that make innovative use of the controller. Think of how much fun a flight combat game could be if the wiimote is used as the control stick. You hold the wiimote like you would a joystick, tilt it to control your direction and the a button and trigger are your guns. The wiimote brings a whole new level of gameplay to existing games as well as completely new games. Nintendo's success all comes down to successful implementation of the controls. If they keep making games that are innovative, fun and easy to pick up they will succeed. I only hope that they make some more adult games too insted of doing all kiddy games like they have in the past.
 
Technoob said:
I guess we'll have to see if they ramp up production any quicker. They sure aren't doing it with the DS though. Those are still impossible to find, and its a handheld.
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I dont know where you live, but here in Indiana DS lites are everywhere.. as a matter of fact I dont think i've ever seen anybody out of them.
 
MRi6000 said:
I dont know where you live, but here in Indiana DS lites are everywhere.. as a matter of fact I dont think i've ever seen anybody out of them.
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QFT, although they where pretty much sold out of em in november/december/janurary, it's now feburary and I can find them in stock pretty much everywhere, I live in wyoming although wii's are still hard to get.
 
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