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Wii’s: demand still ahead of supply

A couple weeks ago, I went looking to purchase a Nintendo Wii for my two nieces.  I was sold on the concept of the Wii’s interface.  Its relative ease of use (as compared to the increasingly complex controllers on many consoles) meant even my three year old niece could play. There were also games that could span generations; games that could be played by video game phobic grandparents, parents and children.  It was something, it seemed, all could enjoy.

On principle I refuse to pay the premiums sellers ask for a Wii on eBay.  Instead, I went store to store.  Over the course of ten days, I made fifty phone calls to different stores.  A few times I was laughed at when I asked if a store had, or was getting more, Wii’s in stock. Once I was hung up on.  Mostly, I was politely brushed off for my seeming ignorance. 

wii-page According to staff I questioned on the floor at both Toys R Us and Best Buy, stores have little control of their inventory.  The highly demanded Wii’s are dropped shipped to them directly, and the allocation of units per store is not specified – though typically it’s less than 12 units per store per shipment.   Those shipments are rarely publicized.  There’s no need for promotion.   If there is any promotion or advertising, it is usually limited – an ad in a Sunday paper for Wii’s that were on sale that day were likely gone by the time the ad was read with your morning coffee.

On a Friday in early April, my phone work seemed to pay off.  Based on information that no local stores had received as shipment in more than two weeks (Best Buy usually received shipments on Tuesdays or Thursday and hadn’t received any that week), knowledge that shipping volumes were allocated somewhat by region, and 1 informative phone call – I found out about an arriving shipment.  Two Toys R Us stores would have consoles unpacked and available for purchase beginning on Sunday. 

Excited and hopeful, I drove to the toy store 45 minutes before they were scheduled to open.   There was a line of over one hundred other wishful buyers waiting when I arrived. One hundred buyers for less than twelve products.  I drove to the other local store and found the same kind of line.  Months after the holidays and still, people were waiting in line for hours to get a chance at getting a console. One hundred people or more, many camped out since the night before, waiting for a chance.

I didn’t get a Wii, and based on reports that supply may not meet demand until late 2008 (or even 2009 according to IDC analyst Billy Pidgeon), I may not for a long time. The Wii has proven remarkably popular not just with games, but across generations for its innovative controller.  In a Reuter’s article widely published in March, there was description of Wii bowling tournaments being scheduled in Retirement Communities.

According to sales figures released for March from NPD Group, the Wii continues to hold the title of top premium game console.  For March, approximately 259k Wii’s were sold in North America (as compared to 199k Xbox 360 consoles, and 130k Sony PS3).  In the 5 months since its introduction, the Wii has sold somewhere near 5.5 million units world wide.  Nintendo is also dominating the handheld market with sales of approximately 508k DS units. (The outdated but reasonably priced, Sony PS2 was the second leading seller in all consoles behind the DS with sales of approximately 280k). 

Notably for Nintendo, which releases its earnings in a few days in Japan, the Wii is not only popular but profitable. Unlike its premium next-generation console competitors, the console has never functioned as a loss-leader for other revenue, or been sold at a discount to actual cost.  I suspect the profits are only going to increase.  Nintendo’s innovations have shocked the industry.

Over the coming months, as more and more titles become available for the console, I wouldn’t be surprised if demand remains comparably high.  Microsoft and Sony may offer promotions and incentives to compete, but neither the Xbox nor Playstation have the ability to appeal to such a broad demographic.  The Wii is a game for everybody, not just the gamers – even if its graphics rendering is less impressive.

The Wii has the potential to be for video-gaming what the iPod has been for MP3 players.  It’s slick, innovative.  It’s easy to use.  It’s an interface that welcomes rather than scares away.  Anybody with a little gadget lust is a potential customer.  I know I still want one.

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