Nintendo May Pull Wii Ads To Avoid Hype

Due to the lack of product on store shelves and overwhelming demand, Nintendo is considering plans to pull marketing campaigns for the Wii during the holiday season. "The company recently dismissed suggestions that it intentionally engineered shortages to build up hype for the Wii. It claims to be producing 1.8 million of the consoles each month at full capacity. 'The issue of supply management has to be questioned, not least because 2008 is going to be the crunch year for the Wii. It's then that we'll discover whether it's a fad or something with legs,' Screen Digest analyst Piers Harding-Rolls told The Times."

oh good

[Anonymous Coward]

Hopefully next year we'll find out if the iPod is just a fad or if it has legs too. How long does something have to be popular to officially not be called a fad?

Re:oh good

[p0tat03]

It's a "fad" so long as a minority group of people can act smug and self-righteous about not going with the flow :)

Re:oh good

[Pluvius]

The Wii has only been out for a year. Considering the constant supply shortages, that's not been enough time for most of the people trying to get one to figure out if they really like it or if they were just hyped into getting it. Also, the MP3 player was already a proven concept by the time the iPod came out, while waggle wasn't.

Rob

Re:Makes sense

[EggyToast]

I agree with you, except that Coke is a beverage; their advertising isn't to get people to buy a singular item, but to get people to think "Hey, a Coke, I should drink one."

I see lots of billboards around bus stops with, say, 3 empty cans of coke that say "3 hour meeting" or something witty. Their advertising is trying to get people to drink more of their product. Arguably, those people are already coke drinkers -- they just don't drink enough for Coca-Cola.

People only buy one Wii, though, and if everyone is buying all they can make, they don't need to advertise. Coke, though, there's always coke on the shelf, so there's always more to sell.

Re:oh good

[DerekLyons]

As opposed to the minority who act all smug and self-righteous because they have the latest cool gadget?

Re:Flipping Wii's

[EMeta]

EBay Wii resellers are just an inevitable part of the economics of capitalism. If this was a commodity, the price would rise instantly as demand started to approach supply. Here, Demand far exceeds supply, so the MSRP is an artificial price ceiling. If I was in the market for a Wii and didn't have the time to search for one, I would appreciate that there was service charge I could opt to pay for someone else to find one for me. In other words, why the hostility towards the trade?

Re:Flipping Wii's

[AK Marc]

If I was in the market for a Wii and didn't have the time to search for one, I would appreciate that there was service charge I could opt to pay for someone else to find one for me. In other words, why the hostility towards the trade?

Do you know how scalpers work? They buy tickets, all the tickets to an event. "Fair price" in the free market is the price that maximizes profit with infinite supply. That is, if there were an infinite number of tickets to see the Super Bowl, what price for all tickets would maximize profits? That's the fair market price for an item (not strictly true in this example, however, because every seat has a different value for proximity to the action and such, but we'll overlook that). However, monopolies have different economics. You maximize profit, regardless of the number of units sold. That means that scalpers buy all the tickets, then set the price so that they will maximize profit for the limited total number of tickets. If the Super Bowl has 10 people that would pay $10,000,000 to watch it and past the 1000th person, no one would pay more than $10,000 per ticket, then it would make more sense for scalpers to sell tickets for $10,000,000 each, sell 10, and take a loss on the remaining tickets they bought. Still, charging $10,000 per ticket is better than selling them all at $100. So what happens is that the "service charge" you are talking about is a monopolist surcharge.

The same economics work with anything that has limited supply and the price isn't adjusting to the market. What the free market demands should have happened is that Nintendo should have released it at $300, rather than $250 to get demand down to where supply is. But they set the price low and the demand was high, resulting in sellouts. But one thing that's making the sellouts worse is the unknown inventory of unused Wii. When the scalper buys one, it isn't used. That is one that isn't on the market, reducing supply. The more scalpers there are, the more this becomes an issue. At some point, the number of scalpers will exceed the demand. As such, people will be paying scalper prices for the sole reason that scalpers bought items they didn't intend to use, reducing supply and creating an artificial shortage. That time will come soon, maybe as soon as the Christmas returns hit the stores in early Jan, perhaps not until a little later next year. But there will be a point where the cause of the fee you mention is the same people that are charging it. Regardless of all else you could say about that, "not nice" would apply. That is why people don't like it.

Re:It's about time they get it...

[dctoastman]

It's totally easy to keep a "semi-constant" stock when no one wants your product. Right now, Nintendo has sold more Wii consoles than Microsoft has sold 360 consoles. And the 360 had been in stores for about a year before the Wii came out. So divide the number of Wii consoles sold in half (current estimates are saying 13 million) and let's talk about hypothetical.

If only 6.5 million Wii consoles had sold in the same time frame (still more than the PS3) there would be no shortage right now. Or ask this question, if demand for the 360 was the same as for the Wii, would we see 360 consoles on the shelves? (Just double the number sold currently (around 12 million)) Do you think there are 12 million more 360 consoles in stores right now?

Hell, Sony wishes they had Nintendo's problems right about now (not enough stock for overwhelming demand, making cash hand over fist, maintaining top-notch development studios).

So, in most respects there are no shortage of Wii consoles being produced, Nintendo just has the problem of almost everyone wanting one.