General Question

deepseas72's avatar

Why don't they just increase the production of the Wii ?

Asked by deepseas72 (1076points) December 18th, 2008

Why, in this world of mass marketing and instant production, are they not able to keep up with the demand for the wii? Hasn’t it been like two years, and they are still hard to find year round?

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10 Answers

ncanderson42's avatar

Supply and demand.

As supply decreases, demand increases.

cak's avatar

Considering that Wii is the only one making money, I would be willing to bet they like things, just as they are. I believe (according to something I read a few weeks back…can’t remember where!) the Xbox 360 is breaking even and the Play Station 3 is still losing money. Wii is still in very high demand and hasn’t flooded the market, forcing a price cut.

hypeserver's avatar

cak Where in the world do you receive your statistics? If it’s from Game Informer god so help me.

tonedef's avatar

This is the third year in a row of Wii shortages. Production is higher than ever, and Nintendo sold 2 million in November, which is staggering.

The reason for the shortages, according to Nintendo, is because they have to sign contracts requesting a certain production rate for the holidays very early on in the year. Nintendo doesn’t know what will happen between March and November, and may have been conservative in their production capacity. That being said…

First year shortage? Fine, it just launched.
Second year? Really? Still not enough? I see dozens of PS3’s and Xboxes everywhere.
Third year? This is just silly. Manipulation of supply to make a 3-year-long “Cabbage Patch Kid” craze.

cak's avatar

@hypeserver – like I said, I don’t remember, but I’ll google today and post it. I’m not a big gamer, it was something I was reading to my husband (the gamer in the house).

cak's avatar



^^^that article only references the Wii and Xbox 360.


Like I said, I’m not an expert, I’m still looking for the article I read…but I’m not going to spend all day looking for it, either. I’m just commenting on something I find interesting, but this is not my big area of interest.


dynamicduo's avatar

Here we go, cak, I’ll take care of this analysis :)

There are no actual statistics, hypeserver. Obviously they companies don’t want to disclose it, they gain no advantage by doing so, so why would they? In fact it’s a competitive disadvantage if they share it. Thus all the numbers being passed around are speculation at best, but some of which is pretty close to true. To start, we know the Wii posts a profit per unit sold, unlike the PS3 which costs Sony more than they make (it’s always the case with PlayStations, they have advanced technology thus Sony has to subsidize it, it was the same thing with PS2, in this gen it’s the Blu-ray player, here are more numbers from back in 2006), and the Xbox360 which while it might have been able to start making profit per console (back in 05 they were losing about $125 per unit), the Red Ring of Death and other faulty hardware fiascoes have long since killed any profit they’re making. The most recent external analysis regarding the Wii’s production cost, based by looking at the cost of the components, is $92. Sadly we can’t look at any of the actual core data fueling these reports, it’s produced by Merril Lynch analysts and thus you need to pay to access it.

To answer the original question, it’s in Nintendo’s advantage to have a firm control over the amount of Wiis they put on the market. I mean, look at where it’s gotten them: it’s been THREE YEARS since the console was launched, yet it’s still a hard to find item this holiday! Never before has a console ever been in such high demand for such a long time. If they had boosted the production of their factories back last year, for example by having a night shift, there would not be such a high demand this holiday season as more people would have bought Wiis during the year. I’ve read articles where the CEOs discuss how they have increased production, but they just can’t keep up with the demand without building entire new facilities. And there’s nothing stopping them from doing just that (well now there is, the economy). In reality though, they’re quite happy where they are right now. Is it a conspiracy? No, it’s just them doing business the way they choose to.

cak's avatar

@dynamicduo – thank you for finding some useful info – I appreciate it!

oh…I just saw I didn’t post my last “link”....I think that’s a sign I need to go take a nap…damn cold!!!

hypeserver's avatar

dynamicduo I know there are no real statistics I was just trying to prove a point.

mdrnmouse's avatar

i didn’t read anyone else’s, but ncanderson42 is correct.
by jeeping the supply low, they increase the demand, which means they can raise prices and keep the value high, turning a much nicer profit than a different way.

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