Sony game division makes a profit

[mcwildcard]

Unless I'm wrong, Nintendo are producing over a million a month, thus to outstrip demand, we are talking lets say 0.5 to 0.75 million extra a month?
Just tell me any 'supplier' that has that capacity that can be brought on line in 5 months?

I think that your numbers are a bit out there, it's only some countries where demand is outstripping supply, so with the correct redistribution, the problem would be a fair bit less than you are assuming. I'm not going to even attempt to cite specific suppliers who could be suitable for the job, it's not my market and I'm not going to pretend to know which niche manufacturers fit the bill.

I believe from my experience, that we are talking a top end supplier's total capacity required for those figures.. and then tell me they wouldn't want serious setup costs and/or inflated unit prices with some serious contract in place.. they aren't going to empty their factory just to produce Wii's for a short term contract unless it's for the right price, and I imagine that wouldn't look good on the Nintendo profit plan.

Well see above about the numbers involved, but either way there would certainly be inflated setup costs, however, considering the popularity of the system, Nintendo would likely be willing to accept that to a point, because the profits from the additional sales would outstrip the extra production costs.
In fact, it's likely that the more systems they need to meet demand, the more flexible they'd be with their profit margins.

And they aren't going to use 'several' suppliers with smaller quantities on short term contracts either, that's going to be multiple setup costs, higher unit costs, quality issues, etc, etc, I'm sure MS and SONY never do this either..

Agreed.

Then of course there's the risk element, the analysts have no idea if it's a fad or whether it will continue, it's caught people by surprise, so I imagine Nintendo are not willing to take the risk of investing enough for a complete 'factories' worth of production to be made available..

I'd say that Nintendo have maximised the production facilities they already have and won't commit to more suppliers due to a combination of the management of several suppliers, increased unit cost and the lack of a good low risk sales forecast.

But if they were to grant a short term contract, then the market later went belly up, they would have the option of reigning in production at their own factories until they'd shifted the remaining units from the contracted supplier.
It'd be more expensive, but if managed properly, the reduction in profit margin would be minimal.

I really don't see this as mis managed to the degree you do, I think you are applying black and white rules to the situation based on SCM knowledge, when it's partly very high volume SCM and partly an uncertain sales forecast.

I don't see it as mis-managed at all, I see it as entirely planned and exquisitely executed marketing. Granted, the initial sales figures were completely unexpected to everyone, including Nintendo, but they reacted swiftly and manipulated the hype absolutely flawlessly.

 

[scorza]

MS have the highest attach rate by a mile, and have sold a complete shedload of consoles (~16 Million), at the moment they are making money big style... if you really think otherwise, that's your opinion, but I can tell you that it's very very far from the truth.

MS's Entertainment and Devices division hasn't seen a full year of profit yet. 2008 looks like it might finally happen for them, but either way that's not "making money big style". If I was a shareholder I would wonder when I was going to see a return on investment.

 

[Mr Men]

MS's Entertainment and Devices division hasn't seen a full year of profit yet. 2008 looks like it might finally happen for them, but either way that's not "making money big style". If I was a shareholder I would wonder when I was going to see a return on investment.

LOL you and your "if I was a shareholder" comment, when will that get boring? You are not a shareholder, and their shareholders seem very happy, what does that tell you? They are already making returns on their investment, you can't just buy shares in the loss making console division, you are in with the whole company, making loads of money and making your investement grow, not many company's can deliver that sort of return for your investment.

 

[scorza]

LOL you and your "if I was a shareholder" comment, when will that get boring? You are not a shareholder, and their shareholders seem very happy, what does that tell you? They are already making returns on their investment, you can't just buy shares in the loss making console division, you are in with the whole company, making loads of money and making your investement grow, not many company's can deliver that sort of return for your investment.

LOL look up what return on investment means. I'm not talking about shareholder investment, I'm talking about Micro$oft's investment.

And no, I'm not a shareholder - I don't believe in investing in companies who have no respect for the law and frequently flout it. One day the US government will grow some balls and do what it should have done ages ago and break up Microsoft. Lets see how the EaD division does when it has to stand on it's own two feet

 

[Mr Men]

Will they break up Sony too?

 

[scorza]

Will they break up Sony too?

Does Sony have or indeed abuse a monopoly?

 

[Mr Men]

Does MS?

 

[scorza]

Yes.

 

[wannabedamned]

Look up the Microsoft with regards to an antitrust scrutiny.

 

[GarethDW]

Does MS?

Wow, did you really have to ask?

 

[Mr Men]

So you think they still do it? past is past, they got dealt with, current day, then are they still the same, I say no not in the slightest.

 

[wannabedamned]

I have to say I've never noticed Microsoft change in anyway.

Infact I think the only difference i've noticed is the fact they no longer offer DVD support out of the box for their Windows Media player. It's now an addon.

Hey, I have nothing against MS, If I could monopolise the world, believe me I would do. It's business and money making in the end afterall.

 

[Mr Men]

So what do they monopolise then? what do they force you to use

 

[rp2000]

So what do they monopolise then? what do they force you to use

I think the last set of antitrust cases (which are still not yet fully resolved) centred on Internet Explorer and Windows Media Player. The bundling of these applications was said to "stifle" competition in the market place. This was decided by a set of people with much more knowledge about the intricate workings of Microsoft than any of us.

I believe there was also an issue regarding not allowing Windows source to be fully accessible to third party companies, to enable to bring out products of a comparable nature to IE and WMP.

It's all very well documented around the internet, I am surprised you have not read about it in the past as it has been ongoing for the last 5 years (or more?)


rp2000

 

[wannabedamned]

So what do they monopolise then? what do they force you to use

When you go to dell/pcworld/curries/any other shop like that.

What is installed on every PC they offer?

When you go into a business environment, What is installed on 90% of PCs? (10% of businesses are finally waking up to Linux)

What is needed on a home computer to allow streaming of video content to the Xbox 360?

-
Again, Like I said. I have nothing against it. but they certainly do push their dominance. I am sure, You will reply to this, saying something like yeah, and whats wrong with that. And as I said, In my eyes, Nothing. but in the world of business.

Read what it is they were doing wrong in the past, And look at the things I just said. They are the same things they were getting slapped on the wrists over before. Just in new forms.

 

[Mr Men]

There is plenty of 3rd party alternatives to streaming to a 360, you can even stream from a USB drive, so no I don't think that is forced on you. What is installed on all the Mac's in the shops you mention?

 

[wannabedamned]

There is plenty of 3rd party alternatives to streaming to a 360, you can even stream from a USB drive, so no I don't think that is forced on you. What is installed on all the Mac's in the shops you mention?

I knew you'd pick on what i said lol.

Look i'm not arguing about macs, I said PCs.Which btw do have Xp on them now

As for the 3rd party options available for streaming, yes fine. They exist. but how much better would they work, if those 3rd parties were allowed access to MS source code?

 

[Mr Men]

Most have Vista now

So you want MS to be an open source now? LOL come on that is being silly. I never had a problem with the 3rd party apps working with the 360 either.

 

[scorza]

He means access to the Windows API, so that third parties can compete in the Applications market - MS Office etc.

 

[JUMPURS]

So you think they still do it? past is past, they got dealt with, current day, then are they still the same, I say no not in the slightest.

http://www.msnbc.msn.com/id/22673684/

From the 16th of January 2008.