News
Reggie Fils-Aime: 2008 will be ‘complicated’
Tim Ingham Dec 20 2007, 10:49am
Comments (8)
Lack of Christmas stock will affect company’s operation beyond festive period
Nintendo of America president Reggie Fils-Aime has said that its current global lack of Wii and DS stock will continue to cause headaches for the platform.
Fils-Aime told Reuters:
"The level of demand we are facing complicates all of our future business planning. All of that becomes a much tougher exercise until we have supply and demand curves that intersect."
"The DS continues to perform exceptionally well, with some retailers voicing concerns about DS inventory going into the holiday.”
"We don't have to remind retailers of the strength we have right now. We are simply making an observation and that reinforces our point quite nicely with retailers.”
Nintendo's top priority was to satisfy Wii demand because the issue was an obstacle to future plans, Fils-Aime added.
"We at Nintendo America are focused on getting to the point when any consumer can walk into any of our retailers and find a Wii. Then we can plan, on an ongoing basis, the rest of the business," he commented.
Comments
“Pure hype.”
Posted by: Zed Zee - Dec 20, 11:40am
Does Nintendo no longer bother having meetings?
I mean, if you have a popular product and you're not making enough of it, allegedly, you would normally have a meeting with all the important dept heads or VPs or whatever and you'd decide that you need to open up another manufacturing line or sign a deal with a third party manufacturer to produce the extra capacity for you.
Nintendo has 'had' this so-called problem for so long now, so why aren't they doing something about it already?!
Unless, of course and more likely, that this is actually a business tactic to keep them flogging more of their ****-e console and hand-held.
“Re: Pure hype.”
Posted by: jessy - Dec 20, 2:00pm
Do you really believe that is is business tactic?
Most parents who want to buy a Wii for christmass, want to buy the wii because it is a CHRISTMASS GIFT. They will probably not buy the wii in january. Most of these sales are lost sales.
Nintendo is producing 1.8 MILLIONS wii per month. Think about this number for 2 secondes.
How, and buy the way, for chritmass, you should ask fro a bran as a gift.
“Re: Pure hype.”
Posted by: scottmpamp - Dec 20, 4:45pm
I don't know the fine details of production costs etc with the Wii, but it probably boils down to a cost/value analysis of whether the cost of building a new manufacturing facility is worth it or not, and whether the revenue from the extra production will compensate for this.
I think Nintendo themselves have probably been believing what most analysts have been saying about the Wii - that it is a passing fad that will burn out and hence to build extra production would not be worth it. They probably never truly expected the demand to continue to be as high for as long, although publicly they have always claimed it isn't a fad.
Who knows - I would like to believe a company with as much experience as Nintendo would have better demand planning procedures than they appear to have - I truly believe they have just been caught out by an unexpected level of demand, and economically there is nothing they can do about it.
I don't believe for one second this is a marketing ploy to make people want to buy one - as already pointed out, what is the point if you can't meet demand at christmas. This may have been true a few months ago, and then when demand reached its peak around xmas, massive shipments "suddenly appeared" - however this hasn't happened so I do not believe this is the case.
Is a nice problem to have really.
“Re: Pure hype.”
Posted by: Danmick - Dec 20, 5:55pm
@ Zed-Zee:
erm... you genuinely think that Nintendo have done nothing about it? They've more than doubled their manufacturing capacity since last year, something that is not easy to do. They are shipping more consoles than Sony or Microsoft and are still selling out - if there was as much sustained demand for either the 360 or PS3 then you'd see exactly the same shortages.
It is not as simple as constantly opening up more manufactoring lines, there is a time constraint involved with such a massive operation.
Yes nintendo should have predicted there would be more demand for the wii than they did before it launched, but to be fair there wasn't a single analyst who predicted it either.
“Re: Pure hype.”
Posted by: max - Dec 20, 7:57pm
The shame is how Playstation let them come in and steal PS2 market and did nothing to stop them. Greedy to get PS3 successful and wasting tons of money on PS3 product development, Nintendo's "lack of planning" has made Sony look foolish and prevented Viva Pinata Microsoft finding a family audience. Wow.
“Re: Pure hype.”
Posted by: Dringo - Dec 21, 7:29pm
There is no way Nintendo are doing this on purpose because they make money on every system sold. It'd make no sense not supplying the demand.
And I think you'll find Nintendo HAVE been trying very hard to meet demand, they doubled their output earlier this year in an attempt to meet it for Christmas.
“Re: Pure hype.”
Posted by: Sablediet - Dec 28, 5:09pm
The Wii was Nintendo's Dreamcast. Though they would have carried on making handhelds regardless, if it had failed im pretty sure they would have dropped out of console manufacture, Nintendo just didn't (at the time before launch) have the muscle to compete with Microsoft and Sony in the console field the way those 2 play(ed) it.
“Untapped demand”
Posted by: Sablediet - Dec 28, 5:20pm
Whats been clear for the past year though is that Nintendo simply had no idea how big the market would be they'd open up with the 'wide blue ocean' strategy they've employed.
An answer then is whoever gave Nintendo a forecast of demand before launch for the Wii woefully underestimated their figures. Though in fairness it's much harder to predict demand in entirely new markets.