Wii will fail to meet demand this holiday

by David Hinkle { Oct 1st 2007 at 4:19PM }

As hard as Nintendo is trying to quench the thirst of the market by upping its production of Wii consoles, things don't look good for the holiday season. If you have someone on your gift list that is asking for a Wii console, your best bet is to pretend you never knew them. Or, tell everyone you know one of their most intimate secrets in the hopes that they will no longer be your friend. It's the only way you're going to get out of the difficult task ahead of those brave enough to attempt picking one of the consoles up this season.

In proper spin fashion, Reggie is quick to claim that it isn't merely a production issue, but that the demand for the system is just ridiculously high. Regardless of how he spins it, we know it's a production issue. And, given that how hard it is to meet the demand, isn't it better for a company to not be able to keep up with demand than that of the demand being nowhere near the output of the company?

[Via Joystiq]

Tags: holidays, production, reggie

Reader Comments (Page 1 of 1)

Chris @ Oct 1st 2007 4:39PM

"And, given that how hard it is to meet the demand, isn't it better for a company to not be able to keep up with demand than that of the demand being nowhere near the output of the company?"

Money spent on production for product not sold or money not earned on product not sold is foregone cash anyway you spin it. The only thing preferable about Nintendo's position is that high demand speaks better of the health of the future of the company. However, it also speaks poorly of management. Leaving money on the table is not generally viewed kindly by stockholders.

vidGuy @ Oct 1st 2007 4:51PM

While that's true, Chris, you need to look at what it would take to meet demand and capitalize on that demand. If Nintendo is producing at capacity like it says it is, then there really is nothing to be done about supply. Installing more production lines would take a very heavy investment and would be only useful in the short-term, as there is almost no chance that the Wii is going to need faster production throughout its whole life.

So, yeah, if they are restricting supply they are losing potential money. But to increase supply past their current maximum output would cost too much money upfront and it's not the smart decision.

Nav @ Oct 1st 2007 4:58PM

However you spin it, if either Sony or MS had the kind of demand Nintendo has had for months now, they would be cranking out consoles to meet the demand. The fact Nintendo - a company that now has the second largest market cap in Japan - can't produce enough of its product to meet demand for over *a year* isn't a sign of impossibly high demand - it's a ploy to keep that demand high.

I remember how incredibly frustrated I became after visiting tonnes of stores to try and find a Wii. I eventually just gave up, but finally got one through a family member who knew someone at a store. Nintendo obviously has to do what they have to do to make money, but I think this sort of cynical posturing by Ninty is just kinda' crappy.

Dan @ Oct 1st 2007 5:00PM

I know a lot of people are pissed. But it doesn't make sense to build 3 million systems in one month and to build none the next month. Part of what keeps the cost of the system low is to build a steady number per month, and not force themselves into a situation where they ever need to slow down production.

Hence why doing a sudden production spike is just bad economics.

Mr Khan @ Oct 1st 2007 5:14PM

Again, thank god for GameCrazy

I got mine pre-ordered early, and avoided this mess

A mess, perhaps, that will be even worse this year. With 1 year of hype amongst the populace (only un-hyped to those reading the game media), a trifecta of good, hardcore titles, as well as a few craze-inciting party titles

Hypz @ Oct 1st 2007 5:27PM

This must be the October Surprise...

Jared @ Oct 1st 2007 5:44PM

he looks like he's about to cry :'(

vidGuy @ Oct 1st 2007 5:41PM

Dan wins one internet. I'd give him my BA in Economics but it sadly does not feature as many pictures of cats.

Alex @ Oct 1st 2007 5:45PM

"The fact Nintendo - a company that now has the second largest market cap in Japan - can't produce enough of its product to meet demand for over *a year* isn't a sign of impossibly high demand - it's a ploy to keep that demand high."

A "ploy?" I doubt it. Why artificially suppress supply where there is already plenty of demand? If it's a ploy, it's starting to look like a dangerous ploy, especially now that the 360 and PS3 have each enjoyed modest price cuts. If you ask me, a 360 would be a great consolation gift for a kid who wanted a Wii but whose parents couldn't find one because Nintendo decided it wanted to restrict supply to "create" demand.

Now if you'd said Reggie's act of announcing Wii shortages (when there may not, in fact, be a shortage) was a ploy to build hype and demand for the system, that's another story. But there's really no reason to artificially limit supply at this point since all that does is limit sales and potentially move your competitors' products.

vidGuy @ Oct 1st 2007 6:00PM

FYI, restricting supply does not create demand. They are independent of each other.

Justin Hall @ Oct 1st 2007 8:29PM

I have an extra Wii if anyone wants one.

DaveC @ Oct 2nd 2007 5:43AM

yeah wii will fail to meet the demand... of having any decent games to play... seriously i haven't touched my wii since i finished zelda, where are all the games????????

if you're not a fan of metroid... then mario is the only game in the foreseeable future worth buying. lame. there hasn't been a decent 3rd party effort yet.. im hoping free radical will make a kick ass FPS