MS is #2 in Europe, contrary to Nintendo's press release

When I see the total numbers from ChartTrack and the total numbers from Gfk then and only then will is be all right in front of me, otherwise there is too much room for spin.

 

teasy, that's a BS repsonse. Why aren't you questioning nintendo euro numbers just as much?

 

I have not come here and said "GC is number 2 in Europe, look at Nintendo's numbers" have I?

So where do you get the idea that I've backed up Nintendo's announced numbers as accurate and called MS's announced numbers inaccurate? I haven't done that.

 

Well, if we take Cube's numbers from Nintendo and Xbox numbers from Microsoft then the above picture emerges. You might not like it Teasy, but it's all academic because the Xbox is still outselling the Gamecube everywhere but in Japan anyway. The situation for Cube is just getting worse. I'm confident enough about this trend that I'm fine with waiting until March or E3 when it is so irrefutable that you look like the foolish Cubehead that you are. 8)

PS: The Asian numbers do include Australia.

 

You vacum floors or work the register when you worked in retail? Pretty clear you never handled the finances, dealt with inventory management or dealt with company credit lines. You don't pay for merchandise up front(any close to reasonable sized store anyway), you hold the merchandise and are charged a very slight interest rate and you pay the balance off when the item sells through. Occasionaly it happens that a store/chain will be doing well enough to pay down some of this early, but it is the exception.

And what 'distributors' would these be? Nintendo's distributor is Nintendo(since you mentioned them in particular). Doesn't even matter if you work for a large chain and place your orders through your corporate office. it goes to them and then to Nintendo and Nintendo ships the product directly to the store.

The "North American" market also includes several countries outside the States and even outside of NorthAmerica(Brazil as an example). Where each company is placing Australlia would about cover the gap in the numbers looking at it what has been posted.

 

I don't know what two bit stores you've worked at. No, I've never had any sort of job as a janitor anywhere I worked, how about you? I've actually worked at a number of retail stores. Compucentre, Futureshop, ToysR us and a few other chains that are now gone. You know you're really coming off sometimes as a know it all, that doesn't know as much as he thinks.

Um, hellow that's NOT 100 % true. Chain stores, such as future shop/best buy, actually "purchase" their inventory. You don't get the inventory for FREE from nintendo until it sells. Other wise you could hold off on paying until each store has sold the very last unit in that order, and in some cases this never happens, and we still see games that are over a year old on store shelves. That wouldn't be good for Nintendo's bottom line at all. I'm sure if that store chain doesn't pay past the date due, then nintenedo will charge interest on what's owed.

Why is it you think Toy Rus has so many old games in stock? do you really think they'd keep them for a year if they had a chance to return them? or do you think ntinendo would want to wait a year or however long it took for them to run out of stock before getting payed? I've seen distributers for compucentre (multi micro -owned by Hartco) get STUCK with a certain NHL hockey game nintendo brought out on the Super nes! They bought a TON of copies from Nintendo since everyone though it would sell (due to the nintendo name) and it didn't, it was a horrible hockey game. They eveuntually had to discount the game to get rid of it, since nintendo wouldn't take a reutrn on it. If they had the option of just giving the stock back to nintendo, I'm sure they would have. do you think they didn't pay nitnendo until all the copies were sold? Not bloddy likely... if they didn't pay for them already, nintendo would have a TON of returns since you could refuse to pay for the full order price.

You don't have to pay the day you get it, and usually they give you a set amount of time to pay. If you really think nintendo is going to give harware out and not have you pay until it's sold, they you're completely living in a dream world!

Let me put it this way, nintendo handles gamecube hardware exactly the same way they handle the sale of games. Your order a certain amount from them, and they give you time to pay it off. if you don't pay it off THEN they can make it more difficult the next time you buy hardware.

Nintendo will sell someone like walmart 50,000 gamecube shipments and give them 30-60 days to pay the debt off (perhaps even more). If you have returns after that set amount of time, then you get a credit towards the next purchase with nintendo. Publishers also do this. games that are discounted from a publisher are typically sold to the distributer warehouse at a set price without the ability for returns. like the sony greatest hits games.

look Ben, you don't know what you are talking about. SOME distrubuters and retailers are the same entity, that's correct. Stores like walmart, they buy the the merchandise and put it into their stores as cheap as possible. Some chains are seperately owned franchises (like Microplay) and have to purchase stock from the dsitributer (compucentre is a better example of that). Some stores have to deal with many different retail distributers. How the hell do you think the mom and pop stores actually get inventory? You think Nintendo talks to every single individual store? NO, they sell the product to a distributor, companies like, multimicro, ingram, and many others sell the product to the smaller stores. Those companies being pure "distrubution" centeres.

That's wrong, it doesn't always go directly to the store! That's only in special cases (such as a launch date) that Nintendo (or any publisher for that matter) will "drop ship " something directly to a store.

More than 75% of the time, if it's a big retailer like say "Walmart", Nintendo send the merchandise directy to (guess where) the retailers distribution centre first. You know, the place where they HOLD extra merchandise? You don't actually think that every time a store orders some more nintendo games, that nintendo sends them out directly to that store do you? do you know how idotic and unreasonably expensive that is? The stores in this case, get it directly from the distribution warehouse (through a re-order).

 

ben, what's you're saying would be a dream come true for retailers, because they could stock the entire world and not have to worry about it costing them anything until it was sold.. No one works on consignment like that... at least not in reality. Some times you have terms for your purchases - meaning you have 7 days or 30 days or whatever to pay for them, but that depends on the supplier. These days most companies are after the money on delivery.

Good reason too, since selling everything on consignment could put you out of business REAL fast.

 

Quincy-

Have I ever tried to tell you how things work inside a software publisher? Tell me Quincy, what are typical inventory deviations and accpetable margins at say, a 50,00 square foot electronics store? What would the typical yearly electric bill be for a 20,000 square foot store? What is the turn around in terms of ordering to fulfillment when dealing with Nintendo or Sony and how did that compare with dealing with Sega?

Working on the finance end of durable goods distribution and sales is something I spent years doing Quincy, name the particular aspect you would like to discuss in detail.

It's called a credit line, and it is what the entire retail industry revolves around. Check up on any retailer that is in financial trouble and how analysts deduce the seriousness of the problem. When stores credit lines get dropped, retailers can't fill their shelves. This is very basic, Economics 101 actually.

Returning games means you eat the interest you have already paid on them and then have to pay shipping back to the retailer not to mention the labor involved. What ends up happening is retailers inform the comapnies that they no longer wish to stock the product at a given price and either they are authorized a markdown or they do end up returned. Almost without fail companies will authorize a markdown to avoid an 'ET/1984' situation.

Here is where you should really pay attention. How do you think Sony announces a price drop on first party software from $49.99 to $39.99 and have it happen at retail within a day? How do you think they drop the price of consoles and have the change take place as soon as they announce it? Do you think retailers are writing off tens of millions of dollars off every year out of the goodness of their hearts? You think TRU would risk a quarters worth of profits to cover a price drop on their on hand PS2's? There is a reason things are done the way they are.

It's not just Nintendo, and it's called the real world. You are thinking about this like some pre industrial age distribution model.

At least this is in the vague ball park. The credit line extends past the sale date.

Idiotic and unreasonable.. Since you use Wal-Mart as an example, walk in to the store, normally on either a Wednesday morning although sometimes on Tuesday afternoon/evenings(depending on the size of the WM) and take a look around for the NoA box they have kicking around(Nin merchandise arrives on Tuesday's) and notice the shipping label on the box. It will have the store address on it with a NoA return address. Nintendo replenishes the stores directly. For the particular example of Wal-Mart, where I'm living right now they are the only game retailer around within a decent driving distance and I happen to know the receiver that works at the closest Wal-Mart to me along with the electronics department manager for the store. When a big game is coming out I take the time to drive the extra twenty minutes down to K-B where I also have discussed the distribution model from Nintendo(they get their shipments from Nintendo Tuesday between 10 and eleven am, the Wal-Mart closest to me gets their shipment later in the after noon and frequently when the reciever doesn't have time to verify the order and enter it in to the system). I bring these two up simply because you mention Wal-Mart in particular(which I happen to know both the primary people involved and have discussed it with them) along with K-B because it is a smaller chain. Do you realize that Pepsi and Coca-Cola also use direct to store shipping and bypass distribution centers? In terms of volume of product, they utterly dwarf all of the gaming companies combined by better then 100:1. Direct to store product placement is actually fairly common, even amongst the largest of chains.

If you talk about Mom&Pop stores, those that have been around long enough will have established a credit line with the company in question. When first opening up then you may see them dealing with a game reseller(not distributor, you do know the difference don't you?).

 

Actually my only question for you, is which store chain did you actually work for?

Yes, it is called a credit line, that was exactly what I was describing. Yes a credit line in which you recieve stock and have a set amount of time to pay your bill. However from what I've seen, and the stores I've worked at (not to mention the manager of a franchise chain I spoke wth this regarding this discussion.) would somewhat disagree with your assumption that all stores work on work on consignment (don't pay until it's all sold). Since it can take an unseen amount of time for stock to COMPLETELY run out, it doesn't make sense to do things this way for both sides.

Yes, it's called "price protection" (you do know what's it's called don't you? just being as snippy as you were below!) and a distributer/supplier/reseller (whatever you want to call it) pays for the goods to be delivered to their warehouse (not always the case since some products are shipped directly to stores as I mentioned before) Once in the warehouse, if they can prove they have a specific quantity of the product in question in stock, and the price drops, the manufacturer, if bound by an agreement, would rebate them the difference between the new cost and the old one based on the quantity they report as in stock.

No it's not just Nintendo, since half the time stock arrives at a store AFTER it was first shipped to a distribution wharehouse. Ever been to a game store and asked for a game, and they say, "let me check the computer" and they come back telling you the game is out of stock in the store, but they still have some at the warehouse, so we can order it in if you like? Has that not happend to you ever?

Perhaps Walmart is a preferred customer of nintendo's, but since walmart is the biggest chain out there, I'm sure they get treated differently then everyone else. After all they do make up roughly 30% of the console game market sales in North America and I'm sure thier owders to each store are totally huge. Anyway, I know stores like Futureshop/a wholly-owned subsidiary of Best Buy & Compucentre, actually have stock sent to warehouses and everything is distributed from there. ONLY for special circumstances are games drop shipped directly to stores. Big shipments to walmarts arrive on big 18wheeler trucks, not little fedex/ups cube vans. Sure there's special cases (like the christmas holidays, but this isn't typical practice for ntinendo to ship to EVERYTING directly to stores.

Well you know what, let's not use walmart as an example. Nintendo or any manufacturer will bend over backwards for them. I'm sure they have credit lines up the wazoo. I've not seen any other stores operate in such fashion. Did you consider that the same nintendo boxes went into the walmart wherehouse/distribution centre and they left those games in the same box and shipped everything they had to send for that order to each store from there? if that's the case, you won't see many other shipping lables on it. Or are you telling me that only nitnendo games come in on the two days you mentioned?

Wait a second here, you say "when a big game is coming out". I specifically stated before that there's certain circumstances for when someone like nintendo will dropship directly to a store. During the rush for the holidays and when it's a very hotly anticipated title and or has an upcoming release date.

Well no doubt since pepsi and coke are both food products that have a perishable date on them. Why would any place that sells food want to keep somethig that could possibly spoil in a warehouse? Doesn't exactly apply to video games since they can sit on a store shelve for years (and sometimes do).

like I said, mom & pop stores do NOT buy directly off nintendo, EVER. They buy off a general retail distributer. The name depends on what you want to call it, I've heard it called many different things. you are correct though I've heard it called reseller as well. i used to work at a Mom and pop store about 5 mintues for where I live right now. This was yeard back at a store called underground entertainment. I even went with them to pick up new game releases.

 

Several actually(time spent working in retail or grocery). Three regional, two others under international corporations with regional names for their stores. I guess you could say six if you include jobs held as a teenager.

That is how the retail market works.

It's called 'price protection' to an end consumer, it would be inventory valuation insurance to a company.

No, never had that happen. The only way I could see that happening is if someone lived in a country outside of the US or Japan and was dealing with entirely different distribution models.

No, it's standard practice to have games arrive at stores on cube vans(actually, a good deal of merchandise arrives that way).

I'll quote myself-

Wal-Mart gets their shipment from a shipping comany, it comes in boxes(usually all of the games are in one, controllers and accessories in another with the consoles having their own boxes). When merchandise comes off of these trucks they receiver then has to open them up, compare the invoices to the product that arrives and enters them in to their computer system. I'm not speculating, I've been on a first name basis with the receiver for the local Wal-Mart for some time(I worked with his daughter for about a year).

When a big game comes out is in relation to why I go. For the release of ED I stopped in to K-B the day before the ship date on the title to ask if they were getting it on Monday or Tuesday. Talked to the manager of the store and she told me that they get their shipments from Nintendo on Tuesday morning although she had no idea if ED was going to be on it or not.

At one point I was considering taking a job at a grocery distributor, they had a ~million square foot warehouse at the singular location I was at(their corporate HQ). Within a half hour drive there is four grocery warehouses that I can think of from where I live(0 retail warehouses in the same range). I see grocery chain trucks on the road constantly which come from their warehouses.

From a consumer standpoint I guess there isn't that much of a difference. From a business standpoint a distribution center works on turnover/sell through, reseller works on purchase/sales. In a business sense they are quite different and require entirely different practices(reseller's are much simpler on the financial end). Depending on how the business model is set up there are certain hybrids. Delhaize corporation as an example has its warehouses function as a distributor but handles the numbers as a reseller(as that is how the business model works for them).

 

Well we'll just have to agree to disagree. I know for a fact the entire retail market does NOT work on consignment. As I said before, special treatment isn't unheard of the bigger your company is, Walmart specifically in this case. But the majority of stores have to pay for the merchandise BEFORE it all sells out, nto only after.

To an end consumer they couldn't care about it. As long as they get what they want at the price they want. For a retail chain, they want a guarentee or money back if the price drops within a specified amount of time. Specifically when they hold merchandise in warehouses.

Lol, you think the distribution models are all that different in canada? It's NOT. period. Actually you should even include japan in that since they operate differently when it comes to console products. In japan you market your products directly through Nintendo or Sony. It's tottally unique compared to north america. In japan nintendo and sony are your distributers.

Yes game that is true, but I was talking about ALL merchandise. II've seen trucks deliver the larger amounts of goods to the larger stores many times.

Well that's fine, every store compares what was ordered with what was delievered to see is anything was missing or lost. That still doesn't mean those stores didn't pay for the merchandise they just recieved.

Well of course they need a place to recieve all the food and handle the distribution, that's not really what i was saying. I'm saying that they won't hold the non perishable food in the ware house for very long. Not nearly as lon as non perishable materail can be held (like video games).

 

Although I can't say for sure what Wal-mart's shipping/receiving practices are, I can tell you how Target does it as I was employed there for a time.

It is not uncommon for items to be shipped direct from the manufacturer if it is a popular item and stores are having difficulty keeping it in stock, like a newly released game console. However, once the store is able to regularly keep a satisfactory quantity of the item in stock, it is shipped to a distribution warehouse first and then to the individual stores. There may be special circumstances which preclude ever shipping to a distribution warehouse and instead shipping directly to individual stores, though this is uncommon for extended periods for cost reasons.

So, as far as Targets shipping/receiving method you are both correct... and I would wager that other large chainstores have similar methods.

 

Well I totally agree with that wordsmyth, I'v ebeen syaing that games are dropped shiped directly form the manufacterer from teh very begining, although Ben seems to think that these stores only pay (Nintendo in this case) when that merchandise sells out. Which is something different altogether, and from what I've seen isn't completely true for all retail stores.

 

Ehm... I've been living in the US for nine years now and I can say for certain that I have had that happen a good number of times Not so much for video games, but mainly for books...

Although there were a couple of games... not new releases by any means, of course. For example, I had to have Babbage's ship Ogre Battle 64 from a warehouse roughly two years ago.

 

You ever seen the paper work on moving half a million dollars in merchandise over the border? It isn't just Canada either, actually Canada is a lot simpler then dealing with a lot of the issues in the EU. Moving large shipments of freight over the southern border is also a major pain. When doing business across the border(in to Canada) larger corporations will often set up a seperate division so they can handle goods as if they were sold to another company as it simplifies things considerably.

Japan operates differently on pretty much everything, not just the console market. I don't have any first hand experience there, just heard from others who have(although I have read a decent amount on their business practices). That said, you deal directly with the console makers in Japan moreso then you do in the US.

You are saying that they have warehouses and use semis to move large quantities of freight? Of course they do. While the retail industry is several decades behind the grocery business in terms of efficiency, they wouldn't ship everything on small vans.

No they don't, not for most things actually(large stores). They will check items that came directly from vendors, they don't check everything that came in from one of their own distribution centers.

You would think that, wouldn't you? Unfortunately that isn't always the case. Many of the grocer resellers(not distributors) pay their employees on a per piece basis, the more items they load on to a truck the more money they make. Those employees tend not to give a shit if the merchandise in the warehouse gets rotated out or not. After seeing how much money is lost due to improperly handled out of date merchandise for grocers I check the dates on everything I buy. The south east region of the US in particular is abysmal in this aspect(their loss ratio is about double that of their northern counter parts). This is simply for 'non perishable' foods, the kind that tend to have a shelf life of a year or more, forget fresh food products(built in loss of 20%-30% is standard).

Wordsmyth-

Ask the receiver at the store where the game shipments come from.

Tag-

Outside of games I have had it happen a number of times. Not for gaming though.

I have been to an EB where they told me they could get an out of print game from another store, that's the closest I've ever had(not doubting you, just stating that is the closest I've had).