Why Nintendo is evil

[Master of Ossus]

I never said that demand is still increasing. I said the demand is much, much higher than has ever been for a console.

Indeed, the Wii's total sales numbers have exceeded the Xbox 360, despite the 360 coming out a full year before. I really don't see any benefit to them creating artificial demand, since its not like they'd change the price.

The purpose is to keep the Wii demand high by making it seem like it is an item that is difficult to get a hold of which therefore must mean good. This is not an uncommon practice at all and is in fact used quite frequently in certain retail markets.

Name one consumer product that's sold in the interest of making it seem hard to get a hold of while intentionally limiting availability. Also, they've already sold well over 10 million of them, so how can they seem like they're hard to get?

[Elaro]

Name one consumer product that's sold in the interest of making it seem hard to get a hold of while intentionally limiting availability.

The PS3? Well, at any rate, it was certainly marketed that way, at least early on. (I do remember a "this is a fancy dinner" comment from one of the Sony bigwigs.)

Yeah.

[Xisiqomelir]

I didn't read the thread aside from OP, but I felt compelled to come and laugh at Kernel for chastising Nintendo's record-setting first year shipments and sales.

Carry on.

[General Zod]

Name one consumer product that's sold in the interest of making it seem hard to get a hold of while intentionally limiting availability.

The PS3? Well, at any rate, it was certainly marketed that way, at least early on. (I do remember a "this is a fancy dinner" comment from one of the Sony bigwigs.)

Yeah.

The PS3 is retardedly easy to find though, so it's not as if Sony is limiting availability. If I had the cash I could walk into any Gamestop and pick one up today. The only thing that makes it seem "hard" to get ahold of is the insane price.

[NeoGoomba]

Well I think the PS3 was shipped in very small quantities, at least initially. However, that tactic didn't do much to artifically increase demand, as all they did was sit on shelves and collect dust while people waited for a Wii or just bought a 360.

[Praxis]

in the sense that they have apparently decided that it's not worth it to spend the money to increase production output.

I seem to recall an interview with a Nintendo exec that talked about how they'd have to invest a lot of money into new factories to increase production, and demand would eventually die down and they'd have now too much production capacity, so it was better to just continue producing at current rates. Or at least something that implied that and the article writer expanded on it.

Don't remember enough specifics to find it again though.

[Praxis]

The PS3 is retardedly easy to find though, so it's not as if Sony is limiting availability. If I had the cash I could walk into any Gamestop and pick one up today. The only thing that makes it seem "hard" to get ahold of is the insane price.

Well, the PS3 is easy to find because demand is low. Compare it's overall sales to the Wii.

Sony has certainly shipped less PS3's than Nintendo has Wii's. Though I suspect Sony is holding back stock.

[Master of Ossus]

Well, the PS3 is easy to find because demand is low. Compare it's overall sales to the Wii.

Sony has certainly shipped less PS3's than Nintendo has Wii's. Though I suspect Sony is holding back stock.

Holding it back for what? More price drops? An insane Holiday season in which they finally catch Microsoft and Nintendo, while gamers everywhere commit suicide on the walls of Halo 3 and Smash Bros.?

[Praxis]

Well, the PS3 is easy to find because demand is low. Compare it's overall sales to the Wii.

Sony has certainly shipped less PS3's than Nintendo has Wii's. Though I suspect Sony is holding back stock.

Holding it back for what? More price drops? An insane Holiday season in which they finally catch Microsoft and Nintendo, while gamers everywhere commit suicide on the walls of Halo 3 and Smash Bros.?

The demand isn't high enough. Sony's already stuffed retail outlets with enough PS3's to meet demand and they're sitting on shelves. They don't want to overstuff it and make it look like stores are overstocked, because that actually damages public perception.

[Crown]

Holding it back for what? More price drops? An insane Holiday season in which they finally catch Microsoft and Nintendo, while gamers everywhere commit suicide on the walls of Halo 3 and Smash Bros.?

The demand isn't high enough. Sony's already stuffed retail outlets with enough PS3's to meet demand and they're sitting on shelves. They don't want to overstuff it and make it look like stores are overstocked, because that actually damages public perception.

There's also the practice of some retailers charging a 'rent' type fee to manufacturers/suppliers for their products. Not as in space, but as in positioning; where in the shop it will be kept, which shelve height, how many, etc, etc.

I imagine given the lack of 'movement' at PS3, Sony is in no position to 'bargain' for more space at (for example), Walmarts. It's not as if Sony can threaten to take their products elsewhere if Walmarts doesn't stock more of it, now is it?

[lance]

Well, the PS3 is easy to find because demand is low. Compare it's overall sales to the Wii.

Sony has certainly shipped less PS3's than Nintendo has Wii's. Though I suspect Sony is holding back stock.

Holding it back for what? More price drops? An insane Holiday season in which they finally catch Microsoft and Nintendo, while gamers everywhere commit suicide on the walls of Halo 3 and Smash Bros.?

The demand isn't high enough. Sony's already stuffed retail outlets with enough PS3's to meet demand and they're sitting on shelves. They don't want to overstuff it and make it look like stores are overstocked, because that actually damages public perception.

Also their are transport costs to take into account.

[General Zod]

Also their are transport costs to take into account.

The transport costs should be relatively minimal. I'm not seeing how they'd be any more significantly expensive than Nintendo's or Microsoft's.

[ANGELUS]

If you artificially maintain a shortage, you increase demand.

Yes, and the purpose to increase the demand is for the prices to rise, but that hasn't happened. They are still under $300 for what I know.

it doesn't take a year to ramp supply up on a consumer electronics device.

Do you know exactly the kind of resources they would need for this? it's not like they can go and switch their workers from slow to fast mode. Building new factories or adapting existing ones are not an easy task, besides, as Praxis stated the demand will eventually fall, and all the money they spent on doing it will be wasted.

If you look at the premium that private sellers charge for the Wii on eBay for example

Yes, private sellers on eBay, not Nintendo itself. The fact that it is so rare to find on the US and that some sellers are using it to their advantage doesn't mean that Nintendo is making any money with it. They still charge those sellers a specific price for each unit.

you can easily buy a Wii off the shelf around here.

Certainly in AU there are absolutely no supply problems whatsoever

Yup, that is the situation here too. You can easily go to any mall and get one. I guess this shortage situation on the US says a lot about their consumism.

[Vendetta]

The transport costs should be relatively minimal. I'm not seeing how they'd be any more significantly expensive than Nintendo's or Microsoft's.

Bigger box. Quite significantly bigger, in fact. Less units per container, more containers, more weight, more cost.

[lance]

Also their are transport costs to take into account.

The transport costs should be relatively minimal. I'm not seeing how they'd be any more significantly expensive than Nintendo's or Microsoft's.

They are still transporting a product that in all likely would not sell, or won't sell for a very long time.

[General Zod]

They are still transporting a product that in all likely would not sell, or won't sell for a very long time.

Of course, if they don't transport it at all, it never will.

[Stark]

I love the projection by people like Kernel. He says 'rare thus must be good'. Who really thinks like that? That's right - idiots. Who bases a console purchase on which one is HARDEST TO FIND? Clearly this is the basis of Nintendo's strategy - to frustrate buyers in order to build a massive fanbase who can't give them money because they don't have a console!

[CycloneRider052]

[quote="ANGELUS

you can easily buy a Wii off the shelf around here.

Certainly in AU there are absolutely no supply problems whatsoever

I dunno, 3/5 retailers where I live in Ohio have at least 1-2 Wii's in stock fairly regular. Hell, when I was at Sam's Club this weekend they had about 20 in stock. They're not all that hard to find.

[Lisa]

in the sense that they have apparently decided that it's not worth it to spend the money to increase production output.

I seem to recall an interview with a Nintendo exec that talked about how they'd have to invest a lot of money into new factories to increase production, and demand would eventually die down and they'd have now too much production capacity, so it was better to just continue producing at current rates. Or at least something that implied that and the article writer expanded on it.

Don't remember enough specifics to find it again though.

that makes economic sense to me, if the product is obtainable even if you have to wait a short while it makes more sense then tooling up to make supply exceed demand, specially since the GC was an also ran.... All nintendo is missing out on are the impulse buys which are probably a drop in the bucket.

nintendo isn't evil for this, they're evil cause my dad (over 60) who has scoffed at consoles the last 30 years is considering buying one.... :O

[Elessar]

in the sense that they have apparently decided that it's not worth it to spend the money to increase production output.

I seem to recall an interview with a Nintendo exec that talked about how they'd have to invest a lot of money into new factories to increase production, and demand would eventually die down and they'd have now too much production capacity, so it was better to just continue producing at current rates. Or at least something that implied that and the article writer expanded on it.

Don't remember enough specifics to find it again though.

that makes economic sense to me, if the product is obtainable even if you have to wait a short while it makes more sense then tooling up to make supply exceed demand, specially since the GC was an also ran.... All nintendo is missing out on are the impulse buys which are probably a drop in the bucket.

It's basic operational management. Factories cost a lot of capital in order to start production. Nintendo has plenty of employees that can easily do the math for the break-even point. If they decide that building another profitable factory is quite risky, then why the fuck would they do it?

And hell, whose to say that it's Nintendo being the chokepoint here? IBM and ATI are both major contributors, and those are just the obvious suppliers; there's plenty more companies riding the Wii gravy train.

[lance]

They are still transporting a product that in all likely would not sell, or won't sell for a very long time.

Of course, if they don't transport it at all, it never will.

So they should transport an already over stocked item so as to be even more overstocked? Are you fucking retarded by any chance?

[General Zod]

So they should transport an already over stocked item so as to be even more overstocked? Are you fucking retarded by any chance?

No, but you seem to be. Why bother mentioning the transport costs at all when they're pretty much a fucking given for selling any product? They'd have to pay them regardless whether they sold or not as soon as the first batch rolled out.

[lance]

So they should transport an already over stocked item so as to be even more overstocked? Are you fucking retarded by any chance?

No, but you seem to be. Why bother mentioning the transport costs at all when they're pretty much a fucking given for selling any product? They'd have to pay them regardless whether they sold or not as soon as the first batch rolled out.

Because PS3s are barely selling and tossing crap into the trash is likely cheaper than transporting said product across an ocean.

[General Zod]

Because PS3s are barely selling and tossing crap into the trash is likely cheaper than transporting said product across an ocean.

Which brings me back to the original point that they still have to pay the initial shipping fees to get them to the stores. Otherwise they'd never be able to even make the attempt to sell them to know they were doing badly.

[Vendetta]

I love the projection by people like Kernel. He says 'rare thus must be good'. Who really thinks like that? That's right - idiots. Who bases a console purchase on which one is HARDEST TO FIND? Clearly this is the basis of Nintendo's strategy - to frustrate buyers in order to build a massive fanbase who can't give them money because they don't have a console!

The theory isn't that "rare=good" but the perception that the shops keep selling out creates an illusion of artificially high demand, which increases real demand because people want the shiny thing that everyone else is buying (whether they actually are buying in any volume or not, the perception that they are is there, because hell, they're always all sold out).

I've never seen any credible figures to prove that this actually works, but that's the theory.

I very much doubt that this is the case with the Wii though, given the rate that they really are selling at (and if there's constant low level stock everywhere, that means they are being produced and shipped at about the right rate to meet demand), the inevitable christmas demand spike, assisted no doubt by the new Mario game, is likely to push demand to a point way beyond what any company can sensibly ramp to.