Teddy Ruxpin, Tickle Me Elmo, and now Wii--times and technology evolve, but overwhelming demand for a single, must-have holiday gift never changes. Nintendo has gained a spot in the public eye, establishing Wii one of the fastest growing gaming platforms ever. With sales come success--and a new set of problems. Interest in the console has led to shortages and consumers are losing patience in what has been the hottest item of the last year. This morning, Nintendo of America President Reggie Fils-Aime addressed concerns surrounding a constrained supply of Wii consoles in a conference call with select members of the media.
In the year since the platform's launch retailers have consistently sold out of stock, only to immediately sell through refresh supply. Despite selling 6 million units in the United States alone nearly a million of which were sold in November, demand for the console remains incredibly high. Consumers have been patient in light of limited supply, but understandably frustrated at the drawn out shortage of units--and the end is hardly in sight.
Normally, hardware manufacturers like Nintendo ramp up production in the summer months when sales are slow. This enables a stock pile of units to be amassed for the holiday season. Excessive demand for Wii prevented this from occurring, stated Fils-Aime. "We're doing everything we can," he claimed. "We're taking steps to alleviate frustration for consumers." One of those steps includes an increase in production. At launch, Nintendo manufactured approximately a million units per month. The company has practically doubled that figure, upping output in April and a second time this month. "Current production run is 1.8 million per month," clarified Fils-Aime.
Not all of these units come to North America, though. Wii units are manufactured in East Asia and then shipped to Washington state where Nintendo of America prepares them for retail release. Fils-Aime wouldn't divulge the exact percentage of units that North America receives of this supply, but given November's sales figures it would have to be at minimum 50%. Even with such a large share, Nintendo of America isn't meeting demand. A production facility based here in the United States could help, however there are "no plans to manufacture the machine here in America," stated Fils-Aime.
Another step Nintendo is taking to address astronomical demand for Wii is a rain check program through retailer GameStop. On December 20 and 21, anyone who pays the full retail price of a Wii receives a rain check for the system. The slip is valid for a console through January 29; naturally, Nintendo plans on refreshing GameStop Wii supply during the month to meet the "many tens of thousands of rain checks." Fils-Aime urged consumers to "hold on a little longer," encouraging participation in the voucher system to ensure receipt of a Wii in the new year.
The program essentially mimics a pre-order even though the console has already launched. Consumers disenchanted with pre-ordering won't find much relief in this measure, especially when comparably-priced Xbox 360 Arcade packages will be sitting right there. Additionally, PlayStation 3 has experienced a surge in sales thanks to Wii shortages and a price cut. It's more than likely that buyers annoyed with Wii being out of stock will resort to putting another box under the tree. A Wii promissory note just won't cut it for gift-givers wanting their loved ones to have something to play with upon unwrapping.
GameStop rain checks are most likely to appeal to hardcore gamers, a demographic Nintendo claims is fueling the Wii's success. "Our research shows that those actually buying are core players," reported Fils-Aime. Anecdotal evidence shows otherwise. Mainstream consumers appear to be the most enthusiastic about purchasing a Wii, whereas hardcore gamers have been flocking to Xbox 360 and PlayStation 3. Much of that movement is derived from a lack of compelling software for Nintendo's console.
The season's top Wii title, Super Mario Galaxy, has sold through over a million units since release in mid November. Beating its sales were a number of titles not available on Wii including Assassin's Creed and Call of Duty 4: Modern Combat. Increased sales for Xbox 360 and PlayStation 3 titles provide evidence of a hardcore shift away from Wii to those systems. As one of gaming's most recognizable franchises, it's rather shocking to see Super Mario Galaxy sales eclipsed by Ubisoft's original Assassin's Creed (NPD reported combined sales of over 1.3 million units in November for the game across Xbox 360 and PlayStation 3). When asked about the retail performance of Mario's latest adventure Fils-Aime retorted, "I find it hard to see a 1.2 million sell-through disappointing."
