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Nintendo Predicts Holiday Wii Shortage
ORIGINAL SOURCE
Jennifer LeClaire, newsfactor.com Tue Oct 2, 12:58 PM ET
The Nintendo Wii is about to celebrate its first birthday, but the shortages that held up profits last holiday season are threatening a repeat performance. That, combined with Microsoft's Halo 3 validating its hype, could mean a slower holiday season for Nintendo.
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The Wii has far and away outsold Sony's PlayStation 3 and Microsoft's Xbox 360, despite the company's inability to manufacture enough consoles to keep up with demand. And now, Nintendo of America President Reggie Fils-Aime indicated he isn't confident Nintendo can produce enough machines for the holiday rush.
"We have been sold out worldwide since we launched," Fils-Aime was quoted by the San Jose Mercury News as saying. "Every time we put more into the marketplace, we sell more, which says that we are not even close to understanding where the threshold is between supply and demand."
What's Going On?
With a statement like that, you have to wonder what is really going on, said Michael Gartenberg, an analyst at Jupiter Research. A company can certainly discover there is a far greater demand than market researchers anticipated for the launch, he explained, noting that companies can even have supply chain issues for months after a launch, especially with new technologies.
"Here we are nearly a year later and Nintendo is saying it is not going to meet the demand for Wiis," Gartenberg said. "At the end of the day, it's a very fine balance for consumers. They may in many cases hold out and get the device they are looking for. But if supply turns out to be too scarce, consumers may decide that it's time to look at other alternatives and other devices, and that can only bode well for both Microsoft and Sony."
The Halo Phenom
What also bodes well, at least for Microsoft, is the blockbuster release of Halo 3. Fils-Aime told the Mercury News that Halo 3's impact on the console battle this holiday season is an open question. "I am fortunate to have a series of (games) that are all going to drive substantial sales for me and are all targeted to different parts of the consumer mix," Fils-Aime said.
Indeed, consumers who opt for the Wii tend to be looking for a more casual gaming experience than the intense shoot-'em-ups Microsoft and Sony offer. The Wii caters to a different market segment than the demographic that stood in line for hours to buy Halo. Still, analysts say there is no doubt that Halo 3 is a console-seller.
"People will buy the Xbox 360 on the strength of Halo 3 and how good that game is. If you are in the video game business, this is a situation you want to be in," Gartenberg said. "Of course, the good news for Microsoft is that Halo is a first party title. We are not going to be seeing Halo for the Wii or Halo for the PS3 any time soon."
Jennifer LeClaire, newsfactor.com Tue Oct 2, 12:58 PM ET
The Nintendo Wii is about to celebrate its first birthday, but the shortages that held up profits last holiday season are threatening a repeat performance. That, combined with Microsoft's Halo 3 validating its hype, could mean a slower holiday season for Nintendo.
ADVERTISEMENT
The Wii has far and away outsold Sony's PlayStation 3 and Microsoft's Xbox 360, despite the company's inability to manufacture enough consoles to keep up with demand. And now, Nintendo of America President Reggie Fils-Aime indicated he isn't confident Nintendo can produce enough machines for the holiday rush.
"We have been sold out worldwide since we launched," Fils-Aime was quoted by the San Jose Mercury News as saying. "Every time we put more into the marketplace, we sell more, which says that we are not even close to understanding where the threshold is between supply and demand."
What's Going On?
With a statement like that, you have to wonder what is really going on, said Michael Gartenberg, an analyst at Jupiter Research. A company can certainly discover there is a far greater demand than market researchers anticipated for the launch, he explained, noting that companies can even have supply chain issues for months after a launch, especially with new technologies.
"Here we are nearly a year later and Nintendo is saying it is not going to meet the demand for Wiis," Gartenberg said. "At the end of the day, it's a very fine balance for consumers. They may in many cases hold out and get the device they are looking for. But if supply turns out to be too scarce, consumers may decide that it's time to look at other alternatives and other devices, and that can only bode well for both Microsoft and Sony."
The Halo Phenom
What also bodes well, at least for Microsoft, is the blockbuster release of Halo 3. Fils-Aime told the Mercury News that Halo 3's impact on the console battle this holiday season is an open question. "I am fortunate to have a series of (games) that are all going to drive substantial sales for me and are all targeted to different parts of the consumer mix," Fils-Aime said.
Indeed, consumers who opt for the Wii tend to be looking for a more casual gaming experience than the intense shoot-'em-ups Microsoft and Sony offer. The Wii caters to a different market segment than the demographic that stood in line for hours to buy Halo. Still, analysts say there is no doubt that Halo 3 is a console-seller.
"People will buy the Xbox 360 on the strength of Halo 3 and how good that game is. If you are in the video game business, this is a situation you want to be in," Gartenberg said. "Of course, the good news for Microsoft is that Halo is a first party title. We are not going to be seeing Halo for the Wii or Halo for the PS3 any time soon."
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