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Nintendo Cuts Back on Wii Manufacturing Orders

by Neal Ronaghan - December 2, 2009, 8:21 am EST
Total comments: 39 Source: http://kotaku.com/5416686/report-nintendo-scaling-...

Two Japanese companies are facing hard times thanks to a decline in the number of consoles being made.

Japanese news outlet Nikkei is reporting that Nintendo has begun to scale back the number of Wii consoles being assembled.

This news is apparently based on heavy losses reported by Mitsumi and Hosiden, two Japanese companies involved in Wii manufacturing. Both of them are facing a 50 percent drop in net profit, a shortfall blamed on the console's "declining fortunes" and a decrease in orders for more systems from Nintendo.

In early November, Nintendo President Satoru Iwata characterized the slowing of Wii sales in Japan as "not healthy". A lowering of manufacturing orders would seem to be a logical result of slowing sales, though North American sales of the Wii console remain robust.

Talkback

NinGurl69 *hugglesDecember 02, 2009

lol?  They're panicking cuz they still profit?

KDR_11kDecember 02, 2009

Makes sense, systems peak in sales at some point.

Michael8983December 02, 2009

Nintendo just needs the right game to come out and revitalize the Wii in Japan. Release a Nintendogs for Wii. Or perhaps that "Kittendo" game Miyamoto was hinting at.  Of course the eventual Dragon Quest title might help too.

mac<censored>December 02, 2009

Also note that the super-strong yen is lethal for export-dependent Japanese manufacturers, and I imagine Nintendo falls into that category to some degree (not as much as some other companies, but the Japanese domestic market isn't exactly in the best of health either...).

ShyGuyDecember 02, 2009

Third Party? Peak Oil?

TJ SpykeDecember 02, 2009

Quote from: mac

(not as much as some other companies, but the Japanese domestic market isn't exactly in the best of health either...).

Maybe the console market, but the Japanese handheld marker (at last the DS) is still doing great. Japan just seems to be moving more from consoles to handhelds for gaming.

Makes sense.  They've generally moved from computers to mobile phones already.

Ian SaneDecember 03, 2009

Why do I have this feeling that Nintendo's response to this will be a minor Wii upgrade similar to how the DSi was released because DS sales has peaked, due to everyone already owning one?  The Wii is a very successful console and Nintendo shouldn't be concerned over the fact that all the people that wanted one have one already.  The whole POINT is to sell games and there is a large Wii userbase to sell games to.  So maybe they should, I don't know, MAKE GAMES TO SELL TO THIS USERBASE.  It's not really about selling hardware.  It's more like you're selling a membership that provides its members the option the option to buy games.

broodwarsDecember 03, 2009

Quote from: Ian

Why do I have this feeling that Nintendo's response to this will be a minor Wii upgrade similar to how the DSi was released because DS sales has peaked, due to everyone already owning one?  The Wii is a very successful console and Nintendo shouldn't be concerned over the fact that all the people that wanted one have one already.  The whole POINT is to sell games and there is a large Wii userbase to sell games to.  So maybe they should, I don't know, MAKE GAMES TO SELL TO THIS USERBASE.  It's not really about selling hardware.  It's more like you're selling a membership that provides its members the option the option to buy games.

A slightly more powerful and slimmer Wii with Gamecube support removed and a Wiimote with built-in Motion +, perhaps?  Oh, and throw in a Web-Cam while you're at it, maybe attached to the sensor bar.  If Nintendo's really sure they're not going to do an HD-capable Wii, the X-Box 1.5  route is the only way I could see them going.

NinGurl69 *hugglesDecember 03, 2009

2 GameCubes + 1 Slap Chop

BlackNMild2k1December 03, 2009

Quote from: Ian

Why do I have this feeling that Nintendo's response to this will be a minor Wii upgrade similar to how the DSi was released because DS sales has peaked, due to everyone already owning one?  The Wii is a very successful console and Nintendo shouldn't be concerned over the fact that all the people that wanted one have one already.  The whole POINT is to sell games and there is a large Wii userbase to sell games to.  So maybe they should, I don't know, MAKE GAMES TO SELL TO THIS USERBASE.  It's not really about selling hardware.  It's more like you're selling a membership that provides its members the option the option to buy games.

Don't forget that Nintendo makes a profit on every piece of hardware sold, so if EVERYONE already has one, Nintendo needs to figure out a way to make EVERYONE to buy it again.

The more hardware sold automatically means more software will likely be bought. Nintendo makes profit on both so should they only focus on one and not the other?

You also forget that the Wii sells more 1st & 3rd party software than either the PS3 or the 360 so it's not like games aren't being made and aren't being bought. There may be more 3rd party blockbusters on PS360, but Wii sells more units spread over a larger quantity of titles. So I really think you have no argument unless you are arguing for Nintendo to make more Big Budget Hardcore Games or for Nintendo to dig deep in it's pockets to get 3rd parties to do it for them. Either way you would be arguing for Nintendo to make more games to cater to you and your userbase.

KDR_11kDecember 03, 2009

They always did revisions for handhelds but never much for home consoles. Handhelds can be passed on to other people when you upgrade, home consoles are one per household.

Well, they often did a single hardware update, but never with added features.

vuduDecember 03, 2009

Some consider the ability to reliably play the games you purchased an added feature of the top-loading NES.  :Q

that Baby guyDecember 03, 2009

Quote from: vudu

Some consider the ability to reliably play the games you purchased an added feature of the top-loading NES.  :Q

Wasn't that feature taken out of the upgraded SNES?  I believe I recall seeing it was less reliable than the original.

What could be done to upgrade the Wii?  Of course firmware to support harddrives, a bigger memory than the 512 MB NAND, and higher output options are obvious.  I suppose DVD support would also work, too.  As far as revitalizing the console itself, I don't know of much that could be done, hardware-wise.  Maybe provide the ability to patch games for new DLC, but that wouldn't bring forth any mainstream support, and really, that ability is already possible through specialized game-centric channels, anyways.

vuduDecember 03, 2009

I think the only worthwhile upgrade they could put out would be the ability to play upscaled Wii games (like the Dolphin emulator).  But I simply don't see them doing that.

NinGurl69 *hugglesDecember 03, 2009

They could add Pikachu.

BlackNMild2k1December 03, 2009

Quote from: vudu

I think the only worthwhile upgrade they could put out would be the ability to play upscaled Wii games (like the Dolphin emulator).  But I simply don't see them doing that.

That would be my argument for a WiiHD all over again.
DVD playback out of the box and 1-2GB onboard flash would also be nice too.
both would literally cost almost nothing.

Ian SaneDecember 03, 2009

Quote:

Don't forget that Nintendo makes a profit on every piece of hardware sold, so if EVERYONE already has one, Nintendo needs to figure out a way to make EVERYONE to buy it again.

The more hardware sold automatically means more software will likely be bought. Nintendo makes profit on both so should they only focus on one and not the other?


Yeah but the profit on the hardware sale should be seen more like a bonus.  Their business model shouldn't be selling systems, it should be selling games.  Making a profit on the hardware is a good idea but if their business model RELIES on console sales, then they're idiots.  The customer to console ratio is one-to-one while the customer to games ratio is one-to-many.  It's a no-brainer which one you not only should focus on but the only one you possible CAN focus on.  Having hardware sales as any sort of focus other than bonus profit and as merely the tool to create a high userbase of potential game customers is as nonsensical as if Nintendo had design NSMB Wii's business plan to be such that people had to buy multiple copies of the same game (ie: more copies manufactured than Wii consoles in existence).

So what's the harm in using a model that relies on customers buying more than one console?  Well it's entirely a con-man sales model.  It relies on deceiving customers into buying minor upgrades they don't need and that don't justify the cost.  Doing something like that destroys customer trust and loyalty and that sort of damage can last for years.

Unless Nintendo plans on releasing their next full-on console that is to be the Wii's successor and replacement they should pay this no mind.  Console sales will peak, it's just inevitable and unless you have the business savy of a six year old kid it shouldn't affect your business model.

vuduDecember 03, 2009

Quote from: Ian

Yeah but the profit on the hardware sale should be seen more like a bonus.  Their business model shouldn't be selling systems, it should be selling games.  Making a profit on the hardware is a good idea but if their business model RELIES on console sales, then they're idiots.

Have you seen Nintendo's profits lately?  Have you seen Sony's and Microsoft's?

Are you sure it's Nintendo that has the broken business model?

BlackNMild2k1December 03, 2009

Quote:

The customer to console ratio is one-to-one while the customer to games ratio is one-to-many.

Actually I'm sure that their Customer to console ratio is closer to 4 to 1 where their customer to handheld ratio is 1 to 1. I see nothing wrong with Nintendo trying to encourage multiple Wii purchases per family. We all have more than one tv and the Parents might want to do their gaming at the same time as the kids. Nothing wrong with having 2 Wii's taking the customer to console ratio down to 2 to 1 in that household.

Since Nintendo makes a profit on ever piece of hardware, letting that income stream dry up because you've already put one console in every gaming house would be bad business. If Nintendo can change it up enough to make me buy a second Wii even though I don't technically need one, then more power to them. Make it happen. there is no reason they should ever just leave money on the table(WhereTF is my BLACK WII!!)if their business model is to make money.

I'm not saying all money is good money, but if they can make a profit giving the customer what they are asking for, then why not. If they can refine their system in a way that makes me feel like i want to pick up the new revision, then why not. It's not like they have one division that is either working on games or working on hardware but not both at the same time, they can and have been doing both, so why wouldn't they try to continue their hardware sales dominance through continued revisions if thats whats gonna keep it selling at a very profitable rate?

They already know that for every Wii bought, 3-4 games are bought to go along with it(on avg.), so it only makes sense to keep pushing that hardware into every home they can, and if you've already reached every home, then sell them a second and third one if possible.

TJ SpykeDecember 04, 2009

Quote from: MegaByte

Well, they often did a single hardware update, but never with added features.

Not to mention that both the NES 2 and SNES 2 came out after both had already been replaced by the next system (the NES 2 came out in 1993, the SNES 2 in 1997).

Ian SaneDecember 04, 2009

Quote:

I'm not saying all money is good money, but if they can make a profit giving the customer what they are asking for, then why not. If they can refine their system in a way that makes me feel like i want to pick up the new revision, then why not.


I just figure that any shot term gain made from conning MORONS into buying a second Wii would not be worth the potential loss of market share due to public backlash.  You know if they get away with it once they'll push it again.  I know Nintendo.  They LOVE to bleed us dry.  And I think that sort of bullshit is exactly why they lost the top spot with the N64.  They pushed their customers too far and all but the most loyal fan said "fuck this" and only by attracting a whole new market they had never been dicked around by them before were they able to climb back.  They try to con us into buying a second Wii that we don't need and they're poisoning their own customerbase.  It'll just lead to the same bad habits.

If Nintendo is to have learned ANYTHING from their fall it's that they can't assume people will just put up with sneaky conman bullshit if they don't have to.  Never think you're invincible.

StogiDecember 04, 2009

Why make an upgrade console when you can just paint it a different color and change up the pack-in?

I think it's wise for Nintendo to slow down. Money saved is money earned afterall.

BlackNMild2k1December 04, 2009

Quote from: Kashogi

Why make an upgrade console when you can just paint it a different color and change up the pack-in?

Because either one is another attempt at bleeding us dry and Nintendo LOVES to do that.
I don't need a upscaling version of the Wii and I hope Nintendo doesn't con me into buying a second Wii just because it Black or something, because if that happens I'm gonna say "fuck this.... they've gone too far".  If they suddenly release a new Wii that(is black &) can upscale(all existing and future games) to 720p  and has an HDMI port in the back, increased onboard flash, a wiimote w/ M+ built in & WiiSports Resort+ packed in, I gonna blow my top and go buy a PS3 because I've had enough of this bullshit. Hasn't Nintendo sold enough Wiis? Why they gotta make a version of Wii that's better than the one I bought 3 years ago? They're forcing me to purchase a 2nd or 3rd Wii for my house and that's just not cool.

StogiDecember 04, 2009

ehm....what? Did you even read what I wrote?

What's this "better" nonsense? It's just paint!

BlackNMild2k1December 04, 2009

Quote from: Kashogi

ehm....what? Did you even read what I wrote?

What's this "better" nonsense? It's just paint!

I was using your response to respond to Ian.

Mop it upDecember 04, 2009

I pretty much agree with Ian Sane, hardware revisions are a despicable attempt to squeeze money from people. I couldn't care less about the profits Nintendo pulls in, I want more games, not hardware.

BlackNMild2k1December 04, 2009

then don't buy the hardware, Nintendo is coming to your house and breaking your current system then holding a gun to your head to buy a newer replacement.
It's about supply and demand and if you aren't the one demanding it, then they aren't supplying it for you. As for the rest of us that want another Wii(or even a 1st Wii) we might like the option of a slightly more capable Wii that what is currently being offered. Even just a different freaking color or a revision with a HDMI port on the back for convenience would be nice. But just because you don't want it doesn't mean there isn't a demand for it outside of your little bubble. One of those revisions could be exactly the thing that got the PS360 crowd (or even the leftover PS2 crowd) to finally jump in.

Mop it upDecember 04, 2009

It's kind of undermining the consumer though and that's pretty low. It's better to just hold off on those features for the next system and make a worthwhile update.

Different colours I don't mind because that doesn't really affect people who already have one.

EasyCureDecember 04, 2009

Quote from: Kashogi

ehm....what? Did you even read what I wrote?

What's this "better" nonsense? It's just paint!

this response makes BnM's post POTY material!

as for the subject at hand... ITS FUCKING NINTENDO! Aren't you used to it already? One of the main reasons i held off on buying a DS for so long was I knew Nintendo's track record with handhelds, and i figured i'd wait for;

a. a new color
b. a hardware revision

I held out just long enough for option A (red DS bundled with MKDS) and yes, felt a lil screwed over when a short time later th e DSL was announced. Oh well, thats life being a nintendo fan. Did i rush out and buy a DSL? No, because Reggie didn't knock at my door and punt me all the way to the store to get one.

Hardware revisions like this do con people, but ya know what i think? the number of people really being duped is much smaller than you'd think. The people that buy these revisions are:

A. the informed/the tech needy; who don't feel cheated at all because they KNOW what they're getting themselves (and their wallets) in to,

and

B. stupid parents with money to waste; because some of these kids who happened to be informed and might just know that such an upgrade IS a ripoff if a wii2 (or whatever example you wanna use) is right around the corner, but beg their parents who DON'T know better and HAVE the money to get it, and do! Then its not really a con on nintendo's part beacause some stupid parent would rather flush toilet money down the toilet than research what the big difference is between this new wii and the one they bought lil jimmy a few christmas' ago.

But aside from all that, it's best to just reiterate; Nintendo making a hardware revision doesn't affect you in the slightest if your mind is already set; You're not going to buy a second wii no matter how much nintendo wants you to right? Right. So why bitch about it?

mac<censored>December 04, 2009

Oh god, are we on the "by releasing newer, compatible, hardware Nintendo is forcing me to upgrade!!1!  they are denying me my fanboy rights!!!" whine again...?

smallsharkbigbiteDecember 04, 2009

Nintendo hit the perfect storm this generation.  They went with standard def (when hdtv rates were low) and kept their price very affordable.  They also released a new control scheme and everyone wanted to see what it was all about thus pushing more more sales to them.  Take away those two benefits and you have the Gamecube situation all over. 

Nintendo makes money always, they did during the Gamecube era.  The Wii has poor third party support, and Sony and Microsoft are coming to the plate with their own unique control schemes.  Will they be better?  Who knows, but the benefit that they had for the Wii that is a strong unknown.  HD adoption has also skyrocketted so I don't think the Wii can afford to go super cheap on hardware again. 

However, they have another unique situation.  Both Sony and Microsoft lost a ton of money this gen bleeding each other dry.  As such, I think they are actually just planning on releasing "Natal" and "Wand" instead of releasing a new console.  Neither of their adoption rates are out of this world so it is concievable, that if they can keep the market excited, they could sell for 10 years.  Nintendo, however, is quickly reaching market saturation.  Can they sell more than the PS2?  Bottom line is who cares.  Most PS2s were sold for less than $150.  The Wii isn't at that price point and won't be for a while if it does hit it so Nintendo shouldn't be concerned about reaching the lower end of the market which are less likely to pay full price for games anyway.  Nintendo shouldn't give up on the Wii.  They should give it good gaming support for the next 2 years.  Then they should release a new console and they could dominate the market again.  They will have the "new" console, they can include features that the PS3/Xbox360 didn't include because they weren't cost effective at the time, and they can start from 0 again and sell rediculous amounts of them. 

This also allows Nintendo to keep the premium brand that they have been trying to do.  I've never liked it, but Nintendo doesn't have a player's choice title, they haven't dropped their price on any games, they didn't want to lower the price of Wii because it stops people from becoming early adopters because they are always waiting for the next price drop.  Same reason they shouldn't release a different version of the Wii with new features.  It leaves the consumer always on the fence wondering if a better deal is coming.  They want you to think this is the best deal now, so don't wait, buy it. 

Mop it upDecember 04, 2009

Quote from: mac

Oh god, are we on the "by releasing newer, compatible, hardware Nintendo is forcing me to upgrade!!1!  they are denying me my fanboy rights!!!" whine again...?

That and "I like to buy useless hardware and think you're stupid if you don't."

Ian SaneDecember 07, 2009

Quote:

then don't buy the hardware, Nintendo is coming to your house and breaking your current system


If Nintendo just makes it a new colour or something minor, no,  it doesn't really affect me.  But something like the DSi for example is like breaking my current system.  When a new system comes out less games are made for the old system.  So yeah they don't technically break your old one but you better be content with what you've got because no new games are coming out for it.  Normally I don't mind this as the new systems usually provide significant improvements and the games that come out for it make use of those and the new system usually comes out after about five years so your old purchase felt like a worthwhile investment.

But something really minor like the GBC or DSi is irritating because new games are made that aren't available for your old hardware but the upgrade is so minor that it doesn't seem to provide any real improvement that's worth the extra money.  The change is also minor enough that the amount of new games is actually quite small.  It's more like they're holding those new games hostage.  And because those systems are an obvious stopgap they have a short shelf life so they're not a good investment.  "Come spend money for a system that is only slightly different than what you've already got so you can play this small handful of exclusive games only for this system to be obsolete in two years when the new hardware that actually does provide a significant upgrade is made available!"  They release a Wii stopgap between this and their next console and that's what they're doing.

To me the whole point of consoles is you buy it and you can play everything for five years.  I don't like multiple SKUs, I don't like minor upgrade stop-gap systems, and I don't even like expansions like the N64 Expansion Pack or the Sega CD.  To me that's not console gaming.  If I want to deal with that stuff PCs will provide me with more flexibility.

BlackNMild2k1December 07, 2009

So if you know it's not worth it and they aren't forcing you to buy it what are you complaining about? If it's not something you want, then no one if forcing it upon you & you aren't the targeted audience.

If they made a stop-gap Wii I hardly think they would make Stop-Gap Wii only games as the stop-gap Wii would likely only be a big enough bump in hardware specs to do upscaling and maybe have larger storage.

NinGurl69 *hugglesDecember 07, 2009

"To me that's not console gaming."

But it's always been console gaming.  PC stuff is changing what's in the box everytime Newegg has a sale.  Console stuff if getting an additional gadget doodad for the coolest useless things.

Ian SaneDecember 07, 2009

Quote:

So if you know it's not worth it and they aren't forcing you to buy it what are you complaining about? If it's not something you want, then no one if forcing it upon you & you aren't the targeted audience.


No, I'm not forced to buy anything and I'm not forced to even go for a full-on new console either.  Videogames are merely entertainment and thus optional in my life.  Doesn't mean I can't complain.  My concern entirely is this "damned if you do, damned if you don't" situation where I can either spend more money than what is truly worth it for a stop-gap or lose out on a small handful of games I would enjoy.  I might not think the price is reasonable but still not want to be without those games.  Surely you've paid more money than you would have liked for something that you just didn't really want to go without.  If Nintendo doesn't do a stop-gap it isn't as big of a deal but they did do that with the DS so I think it's a possibility.

And I'm also not cool with other people getting dicked around by con-man crap even if I'm not directly affected by it and even if the "victims" don't care.  It's just dirty business tactics and so I don't care for it.  And if you want to look at it from the perspective of how it affects me, a company being successful with dirty tactics like this is more likely to continue to use such tactics and will push it as far as they can, and thus I may be personally affected in the future.

EasyCureDecember 07, 2009

Quote from: Ian

Quote:

So if you know it's not worth it and they aren't forcing you to buy it what are you complaining about? If it's not something you want, then no one if forcing it upon you & you aren't the targeted audience.


Complaining on forums is merely entertainment and thus optional in my life.  Doesn't mean I can't find a form of entertainment to simply enjoy, and thats that.

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