Wii production probs

[Rainbow Man]

Because they are going to come up short millions of units come the holiday season.

Speculation.

They could in fact be stockpiling right now with just this situation in mind. Or they might have expanded capacity by then.

The thing is you're acting as if this is already in the past and the battle's been lost for Nintendo.

Probably a bit premature for that, it's only august so far.
Peace.

 

[inpHilltr8r]

Perhaps because Europe was never a stronghold of Nintendo, unlike Sony, or even Sega back in the day.

Well for the last two console cycles, neither was the US, or Japan.

 

[DuckThor Evil]

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

Are you talking about LTD? as worldwide monthly numbers probably puts Wii in front. And what's the point of comparing the production cabability of MS and??? Sony who BTW has dominated the console space for a while, meaning that their capacity has naturally evolved to a high level. 2>1 who would have thought

It's pretty much given that the reason for Nintendo "only" being able to produce about 1 million units a month is because of their assembly capacity and not due to any single part or parts. Increasing that capasity might be hard and costly and what if the demand falls back to a million a month shortly after when they have had the chance to saturate the market? is that hypotethical situation better than where they are now. So I agree that this shortage might be planned at the moment, but it wouldn't be a trivial matter to increase their assembly lines.

 

[bomlat]

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).

From this post two thing is clear:
-you don't know anything about the business that make money from transforming minerals and other natural things to useful things.
-and many other things that I don't want to mention.

just to order the die for the injection mold take half year.
From my memory,if you want to change the product mix of the cpu fab that take months too,without considering any other constrain(example the workload of the fab from other customers).
The ms dicsover the way of the xb hack in january,but it was half year before they was able to made a minor change on the design of the dvd drive.And even the black paste take month to implement.
So, one year to start the production on a new site with brand new tools is not so bad time (i mean from the decision until the full production).

 

[pipo]

And I'm back...

A Nintendo of America rep didn’t deny such a production delay, but still said the company won’t be adjusting its hardware targets. “Nintendo has no revisions to announce to its most recent shipment forecasts at this time,â€￾ he stated in an e-mail.

http://www.next-gen.biz/index.php?option=com_content&task=view&id=6863&Itemid=2

 

[DeadlyNinja]

Translation: We know Wiis are hard to find, so you people better buy them while you still can. We may or may not be able to manufacture enough, so the question you have to ask yourself is: Can you risk it? MWAHAHAHAHA!

Love,

Nintendo.

 

[tongue_of_colicab]

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.

That doesnt make sense. That might work the first few weeks, but after a few months people will be irritated that they cant get one and it will probably start to hurt more than it brings in more sales (which wont, as they dont put more in the shops).

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.

However a Ferrari is something very different from a console. Ferrari's are made for people who dont have to worry about money, therefore building less is better as you can ask more for them as the owners dont care about the price anyway.

Nintendo however makes a product that has to be available to everyone. Nintendo cant make 10 time less wii's and sell them at a 20 time higher price just because they make alot less than demand.

 

[fearsomepirate]

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 ?

It's relative to the man-hours and facilities available. I don't know why you don't believe that factories have limits on their production capacity. Do you think a small plant of 40 guys should be able to produce 70 million chips a month or something? You have no way to say what Nintendo's production capacity is until you know what kind of facilities are available. If they've contracted for enough man-hours and materials to make no more 1m units per month, remember that the factories they contract with spend their time doing other things, too. There may not be many additional man-hours available at their current contractors, and solving the logistical and financial problems necessary to contract with someone else may be slow in coming.

 

[_xxx_]

On the first post: whatever it is that causes shortages, it's certainly NOT the PCB. Every backyard manufacturer can produce that in masses without any problems, it's nothing advanced or special.

 

[dobwal]

That doesnt make sense. That might work the first few weeks, but after a few months people will be irritated that they cant get one and it will probably start to hurt more than it brings in more sales (which wont, as they dont put more in the shops).



However a Ferrari is something very different from a console. Ferrari's are made for people who dont have to worry about money, therefore building less is better as you can ask more for them as the owners dont care about the price anyway.

Nintendo however makes a product that has to be available to everyone. Nintendo cant make 10 time less wii's and sell them at a 20 time higher price just because they make alot less than demand.

Agreed. Ferrari is in the business of selling exotic cars who high value is tied their limited production. Ferraris couldn't demand 200K-1000K if Ferrari pumped out hundreds of thousands of each model each year. There profit model is dependent on a very small share of the overall automobile market.

Nintendo's goals are totally the opposite. You don't take over a market by limiting production. Nintendo is working with a fixed price on the Wii that can only go down. Currently demand is outstripping supply, but Nintendo hasn't increased the price of the Wii to compensate so it can maximize its profits at its current price point. The goal is to sell as many Wii as possible so to maximize software and peripheral sales as this is the main goal of all console manufacturers.

 

[Shifty Geezer]

...but Nintendo hasn't increased the price of the Wii to compensate so it can maximize its profits at its current price point.

That isn't to say they hadn't wished they had started at a higher price. I don't recall any popular consumer good being priced higher once it's popularity was shown. eg. Furbies and Cabbage Patch Kids dolls weren't hiked in price to milk profits. Some middle-men might charge a premium, but the companies AFAIK don't.

Low production serves Nintendo no purpose. It doesn't help their install base and profitability from software (and hardware sales even), nor does it increase the worth of the product such that Nintendo can take more profits per unit. Actually the lack of Wii's in store hasn't resulted in a high eBay pricepoint, which shows consumers are willing to wait.

 

[dobwal]

That isn't to say they hadn't wished they had started at a higher price. I don't recall any popular consumer good being priced higher once it's popularity was shown. eg. Furbies and Cabbage Patch Kids dolls weren't hiked in price to milk profits. Some middle-men might charge a premium, but the companies AFAIK don't.

Low production serves Nintendo no purpose. It doesn't help their install base and profitability from software (and hardware sales even), nor does it increase the worth of the product such that Nintendo can take more profits per unit. Actually the lack of Wii's in store hasn't resulted in a high eBay pricepoint, which shows consumers are willing to wait.

Nintendo set a price that they thought would be competitive and sell a lot of Wii. They obviously underestimated demand but given Nintendo's performance during the last generation, the Wii's traditional tech disadvantage and betting the farm on a new but unproven mechanic as a major motivator for sales, it would be hard not to underestimate.

But there is no point in restricting production when you not trying to taking advantage of it by upping your asking price for it. Whats the point in having both the cheapest as well as the rarest console on the market?