Wii production probs

[pipo]

http://www.digitimes.com/systems/a20070816PD217.html

Due to the tight supply of components such as IC chips and PCBs, Nintendo's plans to expand production of its Wii games console, originally set for June, have been delayed, according to Taiwan-based component makers.

With the delay of its plans, any easing of the Wii shortages in the worldwide market is unlikely to be seen in the second half of 2007, said the component makers.

 

[NighTGhosT78]

Not really a my problem cause i have the console from day one....but i think that it's not so normal to still have production problems after these months.
Maybe they haven't planned from the start a success like the one they are having right now, but now production problems are absolutely not so normal. It's not like the blu-ray diode that it's quite painful.....i cannot see the ultra-tech parts in the wii that can bring to a production problems situation....but maybe i'm wrong.

 

[infinity4]

i was the only person thinking they limited wii stocks so that they can keep the hype up, ie sellout makes it feel more popular

 

[Shifty Geezer]

Not really a my problem cause i have the console from day one....but i think that it's not so normal to still have production problems after these months.
Maybe they haven't planned from the start a success like the one they are having right now, but now production problems are absolutely not so normal. It's not like the blu-ray diode that it's quite painful.....i cannot see the ultra-tech parts in the wii that can bring to a production problems situation...

No, I'm quite with you. Wii is in principle no harder to make than PS2 slim, and Sony were managing well over 20 million of those a year. Although if Wii is selling at those rates now, and they weren't geared up for it, perhaps it is normal? It just sounds weird, when they don't mention a specifi comment. Lack of availibility of PCB's and ICs? Have they tried Maplins?

 

[digitalwanderer]

I bet it's because they're quietly starting to produce the Wii HD....

 

[bomlat]

I bet it's because they're quietly starting to produce the Wii HD....

Yes,and after that decision the CEO will go into the closet,get same paper clip and a rubber chicken and start to live the hard life of the official insane.

 

[tongue_of_colicab]

Not really a my problem cause i have the console from day one....but i think that it's not so normal to still have production problems after these months.
Maybe they haven't planned from the start a success like the one they are having right now, but now production problems are absolutely not so normal. It's not like the blu-ray diode that it's quite painful.....i cannot see the ultra-tech parts in the wii that can bring to a production problems situation....but maybe i'm wrong.

The problem is that nintendo doesnt have enough capacity to produce over a million a month according to Iwata. If they want to make more they need to build/hire another factory and I suppose that isnt done in a moment notice. Nintendo just didnt expect the Wii to sell so fast.

 

[Rainbow Man]

and the GPU. And maybe CPU depending on if it's an off-shelf component or not.

These should also be common enough to produce. They're not doing anything magical and should be a doddle to make at 90nm. I don't know about 1TSRAM though. That might be specialist and limit who can supply it, which would make sense. It'd be nice to have an official comment to that respect.

 

[quest55720]

Not good news for me I have been looking for a Wii for the past few weeks with no luck. It looks like shortages in NA will last well in to 2008. I wonder if Sony or MS can take advantage. Nintendo will fall several million short of demand. Can the other 2 convince those parents to purchase their machine when they can't find a Wii. Should make the holiday season much more interesting now. If they are only going to ship 300-400k Wiis a month during the holiday season MS or Sony might be able to claim a victory this xmass in NA.

It really is mind bogling to me Nintendo has known about the shortages since launch and still has not really increased production by a significant amount in the 10 months since. Some one over at Nintendo really dropped the ball IMO.

 

[tongue_of_colicab]

Like I said, nintendo didnt expect this kind of demand (who did?) and their factories are limited to 1 million units a month which according to Iwata they cant just make more so they need another place if they want to make more which probably takes time.

 

[INKster]

The problem is that nintendo doesnt have enough capacity to produce over a million a month according to Iwata. If they want to make more they need to build/hire another factory and I suppose that isnt done in a moment notice. Nintendo just didnt expect the Wii to sell so fast.

I don't buy that because:

- It's really Panasonic (Matsushita) doing most of the hardware assembly, not Nintendo.
- The IBM PowerPC core is really tiny and very easy to manufacture, since it's basically an old PPC G3 further -from the Gamecube- shrunk down to 90nm and then overclocked. You might say "yeah, but it does have some customized features just for Nintendo", but then i would say that those are probably very minor and don't really influence much the overall IPC of the chip.
- ATI's GPU is, again, a slightly enhanced version of the original Gamecube design.
- Memory and optical drive tech are not really of any concern whatsoever, since they're both long established and cheap to make market standards (plus the Wii doesn't even natively play DVD-Video, therefore avoiding all the MPEG 2 royalty fees to the DVD-Forum).
- The Wiimote motion sensing tech can't be that hard to make, since it's easy to find them selling separately in most stores.


In my opinion, these "shortages" are nothing but carefully planned business tactics.
If they were to allow a colossal "flooding" of hardware now, then the momentarily sales would really spike, yes.
But then, after a few months, the hype and word-of-mouth about something you couldn't yet try out but knew from the media that it's fun would be lost, and they would find themselves on a "slow" sales period just when the holiday season is warming up and the competition is seeding the big guns and blockbuster software titles.
Also, since they actually make a profit from the hardware directly, then it would make sense to control and adjust somewhat the offer in relation to demand.

As Enzo Ferrari (i think ) said, if you find that there are 500 potential buyers for a new super car, then manufacture only 499 of them and watch the value of the product skyrocket.

 

[Rainbow Man]

Some one over at Nintendo really dropped the ball IMO.

How can they have "dropped the ball" when Wii ois the fastest selling console by far in pretty much ervery market on planet Earth? Some one's sense of perspective is a bit distorted IMO.

If they'd been cheapest and NOT been fastest selling..then they probably dropped the ball... Not that anyone with their head screwed on straight really dared to expect them to be fastest regardless of price a year ago.
Peace.

 

[INKster]

How can they have "dropped the ball" when Wii ois the fastest selling console by far in pretty much ervery market on planet Earth? Some one's sense of perspective is a bit distorted IMO.

If they'd been cheapest and NOT been fastest selling..then they probably dropped the ball... Not that anyone with their head screwed on straight really dared to expect them to be fastest regardless of price a year ago.
Peace.

Well, "cheap" doesn't necessarily translate to "the one that sells the most".
The PS2 is still way cheaper and is maybe on par with the Wii in sales figures. It's all in the Wii...mote.

 

[quest55720]

How can they have "dropped the ball" when Wii ois the fastest selling console by far in pretty much ervery market on planet Earth? Some one's sense of perspective is a bit distorted IMO.

If they'd been cheapest and NOT been fastest selling..then they probably dropped the ball... Not that anyone with their head screwed on straight really dared to expect them to be fastest regardless of price a year ago.
Peace.

Because they are going to come up short millions of units come the holiday season. I can understand launch not knowing demand. After a few months of seeing people wait in line anyone with 2 eyes could see the demand. They have had 6 months to work on this issue with no solution in site. If they can't produce any more units than what they can now they will probably fall short by 3 million units in Na alone not counting japan. They ship 1-1.2 million oct-december when they could sell 4 or more million units. If the 360 could sell 2 million during the holiday season last year the Wii could douoble or tripple that. If MS or Sony are savy they can pick up some of those 3 million+ who can't find a unit this holiday season. Those are potiental lost sales going to a competitor.

 

[dobwal]

I don't buy that because:

- It's really Panasonic (Matsushita) doing most of the hardware assembly, not Nintendo.
- The IBM PowerPC core is really tiny and very easy to manufacture, since it's basically an old PPC G3 further -from the Gamecube- shrunk down to 90nm and then overclocked. You might say "yeah, but it does have some customized features just for Nintendo", but then i would say that those are probably very minor and don't really influence much the overall IPC of the chip.
- ATI's GPU is, again, a slightly enhanced version of the original Gamecube design.
- Memory and optical drive tech are not really of any concern whatsoever, since they're both long established and cheap to make market standards (plus the Wii doesn't even natively play DVD-Video, therefore avoiding all the MPEG 2 royalty fees to the DVD-Forum).
- The Wiimote motion sensing tech can't be that hard to make, since it's easy to find them selling separately in most stores.


In my opinion, these "shortages" are nothing but carefully planned business tactics.
If they were to allow a colossal "flooding" of hardware now, then the momentarily sales would really spike, yes.
But then, after a few months, the hype and word-of-mouth about something you couldn't yet try out but knew from the media that it's fun would be lost, and they would find themselves on a "slow" sales period just when the holiday season is warming up and the competition is seeding the big guns and blockbuster software titles.
Also, since they actually make a profit from the hardware directly, then it would make sense to control and adjust somewhat the offer in relation to demand.

As Enzo Ferrari (i think ) said, if you find that there are 500 potential buyers for a new super car, then manufacture only 499 of them and watch the value of the product skyrocket.

I don't care who you are. Just because a component is easy and cheap doesn't mean Nintendo and/or third party manufacturers are able to greatly increase capacity on a whim. No one has infinite capacity to produce a component and if you are a manufacturer of a product that is also dependent several other manufacturers, you can only ramp up production so high to deal with unexpected demand before you have to use and/or find additional resources to increase capacity.

Nintendo's last generation console sold ~25 million consoles over a 5-6 period. There is no way Nintendo expected to sell more than its current production capacity or else it would of planned for it. Providing an optimal supply of your product is something I wouldn't refer to as "clossal flooding" of the market.

The supply/demand model used by ferrari is nowhere near the model used by Nintendo.

 

[INKster]

I don't care who you are. Just because a component is easy and cheap doesn't mean Nintendo and/or third party manufacturers are able to greatly increase capacity on a whim. No one has infinite capacity to produce a component and if you are a manufacturer of a product that is also dependent several other manufacturers, you can only ramp up production so high to deal with unexpected demand before you have to use and/or find additional resources to increase capacity.

Nintendo's last generation console sold ~25 million consoles over a 5-6 period. There is no way Nintendo expected to sell more than its current production capacity or else it would of planned for it. Providing an optimal supply of your product is something I wouldn't refer to as "clossal flooding" of the market.

The supply/demand model used by ferrari is nowhere near the model used by Nintendo.

It seems I've struck a "nerve"...
No one has infinite capacity (neither did i imply that), but ramping up a tiny die, made on a cheap process (90nm), of a 10 year-old basic CPU design can't be difficult, especially when you have a state of the art 300mm IBM FAB and a multitude of other, experienced SOI/SSOI FAB's (Chartered, Freescale, etc) at your disposal.
Also, during that same 5~6 year period Sony sold more than 100 Million PS2's, even without using any outside FAB (they have their own, although not all playstation console chips are made there).

How tiny ?

Yeah, it's that little grey square to the right.

You are here to tell me that a tiny die like that can't be made in much, much higher quantities than a triple-core near-state-of-the-art PPC like the one on the Xbox 360, or the even more complex CELL design of the PS3 ?

Oh, and another thing.
The similarities between the Ferrari model and the Nintendo Wii/DS models are more than the differences, if you take into account the different scale of each business.
Both have a powerful and established name, with a proven track record.
Both almost always have demand outstripping supply for a long time.
Both always make a large profit upfront (i.e., each unit adds immediate value to the company even without taking into account post-buy services/software).
Both make "limited editions" regularly to spur interest and speed the market dynamics (always keep your name visible in the eyes of the public).

 

[inpHilltr8r]

That chip isn't the only component of the Wii. You could have a surplus of them, and you'd still need all the other components, and the facilities and staff to assemble them.

 

[INKster]

That chip isn't the only component of the Wii. You could have a surplus of them, and you'd still need all the other components, and the facilities and staff to assemble them.

Keeping them in equal footing with competitors.
Yet, they seem to have plenty of product on the market, and the combined sales of the much more expensive/complex X360 and the PS3 are still higher than the Wii alone (those components cannot be that complex, since the Wii is smaller than the HD-DVD drive for the Xbox 360).
How do you explain that ?

 

[inpHilltr8r]

Well for one, both the demand and the supply of the Wii is demonstrably greater than that of the PS3 or the 360, so what is there to explain? Even if they weren't, I still don't see a straight comparison, as Sony make a ton of other consumer electronics items, and Microsoft have more money than, well you get the idea.

Also, it's reportedly not supply constrained in Europe. So why the Ferrari tactics in the US and Japan, but not the EU?

I think you're underestimating the complexities of the logistics involved in bringing consumer electronics to a global market.

 

[INKster]

Well for one, both the demand and the supply of the Wii is demonstrably greater than that of the PS3 or the 360, so what is there to explain? Even if they weren't, I still don't see a straight comparison, as Sony make a ton of other consumer electronics items, and Microsoft have more money than, well you get the idea.

Also, it's reportedly not supply constrained in Europe. So why the Ferrari tactics in the US and Japan, but not the EU?

I think you're underestimating the complexities of the logistics involved in bringing consumer electronics to a global market.

Perhaps because Europe was never a stronghold of Nintendo, unlike Sony, or even Sega back in the day.
"Playstation" here in Europe sells on name, and name alone most of the time.