Topic: Nintendo Cuts Back on Wii Manufacturing Orders

[NWR_Neal]

Two Japanese companies are facing hard times thanks to a decline in the number of consoles being made.
 http://www.nintendoworldreport.com/newsArt.cfm?artid=20461

 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.

[NinGurl69 *huggles]

lol?  They're panicking cuz they still profit?

[KDR_11k]

Makes sense, systems peak in sales at some point.

[Michael8983]

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>]

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...).

[ShyGuy]

Third Party? Peak Oil?

[TJ Spyke]

(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.

[MegaByte]

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

[Ian Sane]

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.

[broodwars]

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 *huggles]

2 GameCubes + 1 Slap Chop

[BlackNMild2k1]

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_11k]

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.

[MegaByte]

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

[vudu]

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

[that Baby guy]

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

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.

[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.

[NinGurl69 *huggles]

They could add Pikachu.

[BlackNMild2k1]

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 Sane]

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.

[vudu]

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?

[BlackNMild2k1]

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 Spyke]

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 Sane]

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 "**** 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.

[Stogi]

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.