Soldato
I also believe this, After a year, and still the company can't match demand?!? Seems like a stunt. Obviously, I have no proof, But there's no proof showing it's not a stunt either.
What is up with the price of the Wii?
- Thread starter Jimbo Mahoney
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I also believe this, After a year, and still the company can't match demand?!? Seems like a stunt. Obviously, I have no proof, But there's no proof showing it's not a stunt either.
Associate
I agree, I've never heard of any other product being this popular and in this short of demand, its their financial guys figuring they can make a profit by cutting the retailer supply and hiking up each unit price, simple supply and demand, and at the moment theirs a massive demand!
Lets see 6 months to a year from now when the PS3 is established, you'll see the wii price really drop!
Commissario
Nintendo aren't the ones pushing the price up.
As for manufacturing, as I understand it Nintendo work very closely with mainly one or two companies to manufacture their hardware and have done for years (Panasonic is one iirc), which possibly ties their hands a bit in regards to ramping up production beyond a certain limit, but also helps ensure quality is good (when you've got a manufacturer who has worked with you for years, there is slightly more incentive to do things properly than using companies who might only work with you for 6-12 months).
It's also a fairly major investment to increase production line capacity beyond a certain level, and whilst it's certainly possible you risk spending out very large amounts of money for something that isn't needed a few months later (if you look at Sony's financial records for example, they have huge liabilities/amounts of money tied up in factories that if they aren't very careful might end up sitting idle).
There is also the question of sourcing additional parts - there is a finite amount of manufacturing capability in the world able to produce things like the graphics chips, cpu's and memory used in a games console and getting additional supplies of those (on top of what you've already planned for) can require a lead time of months, unless you are willing to pay a hefty premium for them*.
IIRC Apple for example tied themselves into a fairly big long term contract with Samsung to effectively get first dibs on any flash memory chips made by them for several years, and multiple million units - it meant that Apple got a guaranteed supply of them (before anyone else would get a look in), but were committed to buying a huge number parts that might have ended up not being of any use (Apple gambled on the Nano taking off, if it had not they could have been left with millions of pounds worth of flash memory).
I guess what i'm saying is, that depending on the manufacturing strategy employed by the company it can be possible to ramp up production massively, but it depends a lot on how much they value quality control, their relationship with suppliers, and how much they want to risk - Nintendo generally outsource production to trusted long term partners, Sony do much of it in house, MS outsource everything to third parties who may only be on short term, lowest cost contracts (this is all from memory).
Each method has it's advantages and disadvantages.
*Sony's problems with the laser used in the PS3 is anything but unexpected (it was a new part being made by one or two specialist companies), there was a similar problem with a relatively small and (normally) cheap chip used in DVD/CD players a few years back, caused by the boom in mobile phones (which used the same chip), that was a worldwide problem for a simple chip, and that took something like 6-12 months for production to ramp up to meet demand (think about it for a second, that was a single part, not a device comprising of hundreds of parts, any one of which might cause a delay).
Soldato
The high prices have NOTHING to do with Nintendo. A friend of mine recently got one for her son for £185 at the ass slapping supermarket. They had LOADS in stock, but they had all sold by the end of the day!
Laughs as you completely change what you said - ok I "misunderstood" you
I completely agree with you in general - nothing at all to argue with
The main point I have about the shortage of wii's is that there are two machine specific parts to the wii (insdie the console at least) and thats the mainboard and the cpu/gpu - surely in at least a 12 month period Nintendo COULD if they wanted , solve the problem as these two or three parts shouldnt be that hard to reproduce on a bigger scale as the cpu/gpu is reportedly from their prior console (although a lil faster)
This pretty old article - dont know the validity of it though - indicates that a lot of componants for the wii are through 3rd parties (just an fyi)
http://www.tech.co.uk/home-entertai...-component-suppliers-rich?articleid=607085111
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Associate
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No i don't. This thing is in short supply both here an the US and if Nintendo started diverting enough product away from Japan and mainland Europe to meet demand here there would be even more severe shortages in those regions.
There is absolutely no reason to constrain supply. Wii already has all the hype you could ever want and now it is Christmas time, a lot of buyers that can't get their hands on a Wii will buy something else instead, it would therefore be a lost sale for Nintendo.
Seriously, anyone that think Nintendo is constraining supply needs to go take a Business management course or something. it is not a good way to operate a company.
It is a year on from launch and Nintendo have done a huge amount to help supply issues, this year alone they have upped production from 12m to 18m units a year.... that is a huge increase over such a small period of time. Nintendo have to be very careful with how much they increase the production as as soon as there is a dip in demand, they will start losing money by the bucket load because they will have assembly lines going unused which they have already made a major investment in.
Erm nothing of what i said has changed... the first comment was clear enough but since you lacked the comprehension i decided to clarify it. I won't bother next time. I guess you will just keep on trying to read something that isn't there.Laughs as you completely change what you said - ok I "misunderstood" you
See above about increasing production. It is not as simple as flicking a switch.
Also, i believe the slot loading DVD drive is proprietary as well due to accepting GC disks and DVD disks.
I still don't get why people think it is so easy to increase production of electronic products. It doesn't make sense. People weren't telling Sony to build more factories to make Blue lasers for the initial month or two where PS3 supplies were way below demand.
Things just do not work like that no matter how mass market the majority of the technology is.
Thats rubbish, its an admin/supply/administration **** up/oversight/under estimation/disregard.
Over the course of the year, they have seen supply constantly outstrip demand yet they continue to have stock sat idle in europe and empty shelves over here?
Yes, because that makes sense doesnt it?
Supply problems solved by shunting a (relatively) small amount of extra stock over to the uk (because we are not a big country) but they dont bother?
Doesn't it give you a nice warm fuzzy feeling in your stomach when you see retailers marking these things up to well over £300?
There's no justification for markups like that, "supply and demand" be damned. There's an old saying that goes "you can fleece a sheep many times but you can only skin it once".
Mind you, those that complain about it and still buy it are idiots. The biggest consumer power we have is voting with our wallet.
There's no justification for markups like that, "supply and demand" be damned. There's an old saying that goes "you can fleece a sheep many times but you can only skin it once".
Mind you, those that complain about it and still buy it are idiots. The biggest consumer power we have is voting with our wallet.
Caporegime
That isn't the way retail works. Shops don't buy Wii's from Nintendo then sell them on to us - Nintendo allow the shops to sell their Wii's and once a sale has been made the money filters back to Nintendo. Without trust in that relationship between manufacturer and retailer there is nothing, retailers who abuse that trust by ignoring RRP will quickly find an angry manufacturer demanding answers - unless the manufacturer approves the change in price of course. Nintendo sets the price of their consoles - they know the console market better than anyone save perhaps MS and Sony, it's their marketing that decides what the price should be.
Associate
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No, Nintendo are just shipping the usual amount to the continent. Just because there are no issues with buying one, that doesn't mean there are "sat idle". They are still selling better than any other console, however not enough to create the shortages that we see here.
Like i said, if they diverted more shipments from the continent to here then there would be shortages over there. Nintendo are shipping as many units here as they can whilst trying to manage supply/demand everywhere else.
The UK doesn't take precedent just because some retailers are price gouging. It is still possible to buy the system for £180 in many places when they have the stock.
Yes it is. I am not gonna bother discussing it any more. You have failed to plug any holes in your argument that have been pointed out time and again. You have yet to answer how, if Nintendo is setting a higher price for the consoles, that many major retailers are still selling it at RRP and getting consistent shipments from Nintendo. By your reasoning, Nintendo would have stopped supplying them because they are not hiking up the prices like a lot of the smaller retailers.
Caporegime
Quite simply, the big retailers have to protect their image and relationship with the public. They don't want to be seen as profiteering this Christmas so will not tolerate a price hike, other retailers don't have that problem, and so will sell at any price Nintendo tell them to in order to cash in on the Wii's popularity.
It's disappointing to see that the retailer where I got my Wii from last year, who did a marvelous job handling my pre-order, haven't been allocated any Wii's at all in the run up to Christmas this year
I've sent an email to Nintendo UK expressing my concern at these price rises. I'll let you all know how they reply (if they bother).
Caporegime
are you 100% sure that nintendo do not just use distribution partners globally, dotted out across the regions and nations to filter the product through?
if stock comes from distribution and NOT nintendo directly, then the distributor can up their prices, forcing the retails who buy through that distributor, which they made need to do if they do not have the correct contracts in place with the manufacturing brand i.e Nintendo, then it can effectively force the retailer price up without allowing them to gain additional profit.
or of course distribution could have stuck a couple of percent on, and so can retail thus = higher prices for customers.
on computer hardware, my specialty, very little comes direct from the manufacturer to B2B OR retail, majority is through one of 5 distribution partners in the UK, such as C2000, or Westcoast etc...
The retailer is NOT absorbing any extra cost, so yes you did change what you said. As for trying to guess about my education, throwing insults around you are only showing yourself up.
I never said it was easy - but in a period of 12 months+ (especially if they are monitoring it every four weeks as reported) they should significantly be able to ramp it up.
The difference is that Sony were using a newly invented device, which had world wide shortages - not a standard (albeit slot loading) dvd rom drive - the drive is identical its the technology behind it that translates what is read by the drive, not the drive itself it just sees streams of one's and zeros.
Associate
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If the retailer is selling below RRP then it is THEM that is absorbing that cost. So yes, they are absorbing extra cost. Just like i said.
I said nothing in regards to your education, only that you were unable to comprehend what i was saying, which, yet again, you have displayed with this comment. Lack of comprehension to a post i made has absolutely nothing to do with your education. It was in no way an insult either, i was pointing out that you failed to understand what i was getting at. If it was seen as an insult then a mod would have already taken issue with it.What so an increase of 6 MILLION units is not classed as "significantly" ramping up production? That is a 50% increase on production from February. Maybe we have different definitions of the term significant.
The drive is a proprietary product unless something has changed between launch and now.
The Blue lasers used in the Blu Ray drives are not new technology either, blue semiconductor lasers were developed in the mid 90s. It was just a problem with ramping up production as it was one of the fist mass market devices to use the thing. This would be fixable with new manufacturing plants. How is that any different to new manufacturing plants for Nintendo? Oh, it isn't.
I still don't get how people thing ramping up production by 50% is not taking significant action. Nintendo could be committing commercial suicide if they ramped it up any more only for the demand to drop down to normal levels next year. They are doing what any commercially viable company would do.
EDIT: As for worldwide shortages, the Nintendo had problems with sourcing more accelerometers for the controllers. The article that someone posted here (i think it was you) alluded to the fact that demand increased 6 fold or so for the things creating a shortage there. This has been solved now but still. It is not as easy as you and others are making out.
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Lower demand maybe?
Thats the point.
Jesus, they dont so many units over there, so dont send them so many.
Associate
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They are readily available because they have the right amount of supply. If Nintendo didn't send them as many then there would be shortages over there.
The only time supplies should be diverted is if there are stock piles of the things mounting up over there (which won't happen because Nintendo will only restock the retailers when they ask for more units).
Bah i won't say any more here, people will believe what they want to believe as is always the case.
Sorry but you seem to be clueless.
Nintendo don't see any of the additional profits that retailers make when they mark something up higher than RRP. The retailers are already making a profit based on RRP (otherwise what incentive would they have to even stock it in the first place?) and you can be sure that the buy-price for retailers isn't the same as the RRP, it'll be less - maybe only tens of pounds per console but this will rise with the scale of the buy order, etc.
The RRP is simply a guide price advisory given by Nintendo. They get their money (including a profit on the manufacturing costs, etc) regardless of what the retailer sell it at. For one thing Nintendo can't assume anything about the running costs of a given retailer so it couldn't make a sweeping judgement about one pricing it higher than another.
If you think that Nintendo, or any company, have any involvement in shopfloor pricing outside of setting a RRP then you really are clueless.
Bottom line if we assume two small retailers both buying 10 consoles from Nintendo at £150 a unit (and disregarding how much of the profit is eaten into by running costs):
Retailer A selling it at RRP of £175 is making £25 per console sold.
Retailer B selling it at £300.00 is making £150 (£25 + £125) per console sold.
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