Here you go. A little paragraph there should be somewhat related to the Wii manufacturing situation.
http://www.gamesarefun.com/news.php?newsid=7664
http://www.gamesarefun.com/news.php?newsid=7664
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IDC analyst: Wii supply won't meet demand until 2009
- Thread starter Alcibiades
- Start date
Forgotten Ancient
Banned
Starchasing said:
What else are they spending their monies on? Nintendo's in their most dominating position since the NES era. Regardless of the infrastructure costs of increased production, they need to capitalize on this momentum NOW.
It might be expensive to do so, but hedging their bets on sustained demand despite having two fierce competitors is potentially - and probably - more costly in the long-term. Every ounce of breath their shortages provide MS/Sony offers a chance for them to knock the wind out of Nintendo's sails.
All these companies (Sony, Apple, Nintendo, I presume MS) use the same pool of assembly plants in China to build their hardware. Nobody's actually literally building new factories, they're contracting work from these Chinese assemblers. Like most things you pay a premium for a short-term deal: either you contract out for six months for $TEXAS (translating into higher manufacturing costs per unit) or you contract out for a year or longer, meaning cheaper costs per unit BUT a little extra risk that you won't actually need all that capacity for the full year, meaning you're paying for capacity you won't use.-jinx- said:
The actual length of the terms may vary in reality, but you get the idea.
Add on to that two other facts: Retrofitting a factory to produce Wiis rather than calculators or iPods or even PSPs that it may have produced most recently does still take time and money that has to be invested upfront (and training employees, and expanding distribution deals, and increasing shipments from first-tier suppliers, and so on and so forth). Second, there is a finite capacity to Chinese assembly operations at any given moment. The electronics assembly industry may be booming at the moment, meaning the assemblers can charge a premium anyway AND there's little slack to pick up (leading back to the whole issue of building more factories... though it isn't Nintendo doing the building of course, it's their partners, but it's still expense and delays the startup time even further).
Balance on to all this considerable risk the fact that Nintendo is a notoriously conservative company (fiscally) and you can see why these things can take a while. They can't snap their fingers and double production in a month, or even necessarily six months, and if they did they may be draining profits and taking larger than acceptable risks by Nintendo's standards.
HAL_Laboratory
Member
-jinx- said:
They are already manufacturing more than twice as many units as their competition, and looking for yet another manufacturing partner, it takes 6 - 8 months at LEAST to bring a factory online, so assuming they close a deal with a new partner, supply is still going to be short at current demand levels for at least 8 months, and if demand goes up any, its going to be even longer. Add into that holiday sales and you have a shortage through the end of 2008, if things happen that away. Factories dont grow on trees you know
In all seriousness its entirely plausible for them to be supply limited through the early stages of next year at the least, they supposedly are increasing production by 20%, we will see what the april numbers say. They are producing these things at record breaking pace here, and people still claim they are deliberately holding back production...... its absurd.
Pureauthor
Member
-jinx- said:
Well, we know that no other console on record has ever moved 6 million units WW within it's first five months out. Mayhaps Nintendo simply didn't anticipate the speed with which the market would adopt it.
jordan0386
Member
...Get the hell outta here
Somebody needs to be fired
Somebody needs to be fired
Forgotten Ancient
Banned
Core407 said:
FWIW, I want to buy a second one. I'm not willing to line up for it though, so I'll just wait until one day when a Wii magically appears at my local Target.
Though, I'm not sure if I'm allowed to go there anymore.
-jinx- said:
http://www.*******.com/2006/10/05/wii-production-exceeding-expectations/
Nintendo's best case scenario was having 6 million by the end of the fiscal year, but they have tried to almost double the output and they are still selling out.
HAL_Laboratory
Member
Finn said:
That's fair. I'll be honest, I tried to say that in a way that wouldn't offend ppl, but what I really meant in the words I really wanted to say was that alot of ppl making their predictions on too few factors is idiotic, and that's what alot of predictions about the Wii have been the last few months. It's basically boiled down to a couple of unproven, and unprovable, points that are so general that they're useless. Casuals don't care about graphics? Really, who are these casuals? Do they not care about graphics because it's too expensive? Will the level of acceptable graphics change as time goes on? Will the price and library of the competition change things by 2009?
Seriously, half the predictions have boiled down to "OMG NINTENDO IS TEH AWESOME!!!! NOTHING COULD POSSIBLY CHANGE IN 2 YRS!!!"
I think plenty will change in two years. Wii will move from a launch-window software environment into a second to third generation software environment, for starters. Should we ignore that? Much of the criticism of the Wii is based on the thin library with little consideration of WHY it's thin, and whether it's realistic to think the middling support will change or not. I think it will change, change for the better, and I have historic precedent to back it up.909er said:
The Sphinx said:
No we shouldn't ignore that. I was using examples that could be negative to the Wii as an example of how things could change, since other predictions look at only what could be considered good for the Wii, and ignoring the competitions positive points that could detract from the Wii.
TheRipDizz
Banned
It'll be out of stock till sometime this Summer. Late Summer if Nintendo keeps shipping 250,000 units a month. Consumers will probably be at a loss again this holiday season, but after that, if Nintendo is any kind of well run business, it should never really experience them again. 2009? No.
TheRipDizz
Banned
Please say you didn't just compare a console to a handheld and extrapolated any meaningful correlation from the two. *re-reads post* Nevermind...nightez said:
yeah. the truth is wii is selling PHENOMENALLY well. so predictions about wii's future are MORE LOGICAL if they are possitive IMO. as was mentioned, history, past trends will dictate that good sales translate in better support and overall better games, a more varied library, more competent teams coding software and thus more sales and the cycle continues. EVEY TIME. its a self fulfilling phrophecy.
True that there are unique aspects to this particular scenario and this particular generation of home consoles (and i stress home consoles for those saying that handheld scenarion =! home consoles. in this case i believe we will see a very marked correaltion, but time will tell). But there have always been particular scenarios. every generation. and guess what? the only thing that has been constant is that sustained success leads to more support (regardles of hw power), more demand and the such. So with every week the wii sells more that its competition (it has been how long now? 5 months?) its future looks BRIGHTER, not gloomier. The people that are not so sure about wiis future seem to indicate that its inherent nature (low power=low price, waggle=gimmick?) will ultimatelly dictate its demise when compared to the competition. I believe that is a moot point for the mere fact that THAT IS THE CASE RIGHT NOW ON THE MARKET. People can choose those more sophisticated products right now. And they seem to bemore receptive to the wii. Price cuts? the business strucure of the whole PS3 project makes that very difficult. 360 seems to be in a better position to try and get an offensive price cut, but not so much i believe. And wii can also have pricecuts. ll the way to the magic $99, faster than anyone.
My belief is Nintendo has already struck gold, twice.
True that there are unique aspects to this particular scenario and this particular generation of home consoles (and i stress home consoles for those saying that handheld scenarion =! home consoles. in this case i believe we will see a very marked correaltion, but time will tell). But there have always been particular scenarios. every generation. and guess what? the only thing that has been constant is that sustained success leads to more support (regardles of hw power), more demand and the such. So with every week the wii sells more that its competition (it has been how long now? 5 months?) its future looks BRIGHTER, not gloomier. The people that are not so sure about wiis future seem to indicate that its inherent nature (low power=low price, waggle=gimmick?) will ultimatelly dictate its demise when compared to the competition. I believe that is a moot point for the mere fact that THAT IS THE CASE RIGHT NOW ON THE MARKET. People can choose those more sophisticated products right now. And they seem to bemore receptive to the wii. Price cuts? the business strucure of the whole PS3 project makes that very difficult. 360 seems to be in a better position to try and get an offensive price cut, but not so much i believe. And wii can also have pricecuts. ll the way to the magic $99, faster than anyone.
My belief is Nintendo has already struck gold, twice.
SouthernDragon
Member
Nintendo seems to be the type that hopes for the best but plans for the worst.
AdmiralViscen
Banned
Deku said:
.
Its not so trivial as comparing a console to handheld. Its following the 'market trend' - Nintendo has so much momentum at the moment. And its justified because Wii is not a console in the traditional sense - like the DS, the WII is based on "disruptive" technologies i.e. a design overturning a predominant industry trend.TheRipDizz said:Please say you didn't just compare a console to a handheld and extrapolated any meaningful correlation from the two. *re-reads post* Nevermind...
Besides Nintendo used the DS prinicples with the WII. As Ken'ichiro Ashida noted "We had the DS on our minds as we worked on the Wii". And its paid off big time so far.
....
failing to grasp the obvious distinction between retail prices and component prices doesn't strike me as very logical, but what do i know. wii isn't literally 2001 hardware, but as far as users are concerned, it may as well be. that's why the line won't and shouldn't go away.
titiklabingapat
Member
This thread made me miss Lapsed.
Interesting how analysts have now changed their tone. But judging by the general consensus from you guys on this article I'd say this is plausible. I got sucked into the whole "you'll be able to walk into "store x" on launch day and get a Wii". Whatever GAF thinks about the Wii, i'll go with the opposite, thanks.
TheRipDizz
Banned
Fair enough based on that point, but Wii=DS is how I read your other post and that's just absurd taking all the extenuating circumstances around both machines into account.nightez said:
Eteric Rice
Member
CNL said:
Pretty much, yeah. :lol
Wolves Evolve
Member
I fear for Wii sales number the day after Wii Fitness makes an appearance on Oprah. "So its a video game that teaches your kids... how to exercise?" (cut to exterior shot over Nintendo HQ of a gathering storm, made of hundred-dollar notes). When that happens, like Ripley says in Aliens, "you kiss this - all this bullshit - you can kiss of that goodbaaaye. "
Ether_Snake
å®å®å®å®å®å®å®å®å®å®å®å®å®å®å®
Except there is NO reason for it to be sold out. If they sold 48045830658 a month ok, but this is not the case. It is not difficult for them to produce more consoles (this isn't a very different machine from a Gamecube, production-wise).
Nintendo is probably pretending they can't produce more DS and Wiis to make sure that no matter what the sales numbers are (such as March's US sales) can always be seen in their favor. If it's too low, it's not too low, it's just out of stock. If it's high, well cool it's high and they managed to "ship more".
It's just to hide what the demand actually is (I'm not saying it is low, but that by pretending they can't ship enough they keep the demand blurry, for all we know everyone and their dogs wants a Wii). This prevents any analyst, developers, and publishers, from having ANY IDEA what the actual demand is, and therefore it plays in Nintendo's favor.
Imagine if Sony had been keeping their shipments low, they could have pretended last month's low sales were due to low production rate (and therefore the backlash would have been much more minimal). That leads to less developers/publishers going "OH NOES! CANCEL PS3 EXCLUSIVES NOWZ!", and keeps the future blurry.
Nintendo is probably pretending they can't produce more DS and Wiis to make sure that no matter what the sales numbers are (such as March's US sales) can always be seen in their favor. If it's too low, it's not too low, it's just out of stock. If it's high, well cool it's high and they managed to "ship more".
It's just to hide what the demand actually is (I'm not saying it is low, but that by pretending they can't ship enough they keep the demand blurry, for all we know everyone and their dogs wants a Wii). This prevents any analyst, developers, and publishers, from having ANY IDEA what the actual demand is, and therefore it plays in Nintendo's favor.
Imagine if Sony had been keeping their shipments low, they could have pretended last month's low sales were due to low production rate (and therefore the backlash would have been much more minimal). That leads to less developers/publishers going "OH NOES! CANCEL PS3 EXCLUSIVES NOWZ!", and keeps the future blurry.
Nintendo is a company that always hope for the best, but PLANNED for the worst. They are very, very conservative (or miserly, if you wanted to call them that). They have burned once during GC era, where they have to stop production for six months. Every manufacturing company will tell you that the big sin in manufacturing is idle capacity, in which, stopped production could mean 0% utilization rate (or 100% idle capacity). If possible, every mfg. cpy. will want a 100% utilization rate, for all their production line.
For me, I have a hard believing a 2009 shortage. A 2008 shortage I can believe a possibility for, but not 2009 shortage. This is coming from a person who have 2 Wii, 2 PS2, 3 DS, 3 GBA, 0 PS3, 0 X360 (and 0 XBOX).
For me, I have a hard believing a 2009 shortage. A 2008 shortage I can believe a possibility for, but not 2009 shortage. This is coming from a person who have 2 Wii, 2 PS2, 3 DS, 3 GBA, 0 PS3, 0 X360 (and 0 XBOX).
Ether_Snake said:
Dude. Sony could ship zero and stock would still be plentiful for weeks or months given the rate of sales. March's US shipments of Wii systems were presumably low because they were allocating more European stock (look at the jump in sales figures in Europe; it's now nearly even with those in the US and Japan).
Either way, it's been pointed out that, contrary to popular belief, companies cannot pull millions of hardware units out of their ass on a corporate whim. Nintendo contracts out manufacturers; in the launch window, only one company was manufacturing Wii units. As IGN reported, Nintendo was looking to hire more manufacturers to meet demand.