
Victor Godinez of the
Dallas Morning News offers an interesting spin on the shortage of Nintendo's popular Wii system in the U.S.
Oft-quoted Wedbush-Morgan analyst Michael Pachter told Godinez that the weak U.S. dollar was the main culprit:
With a weak dollar, foreign companies that sell their goods in the U.S. for dollars and then convert those dollars to their native currencies get a smaller profit than if they sell their products in countries with strong currencies of their own (such as Europe with the euro). In other words, Nintendo makes a bigger profit on Wiis sold in Europe than on Wiis sold in the U.S.
So Nintendo, Mr. Pachter said, has been behaving perfectly rationally by sending excess Wii consoles to Europe to satisfy the more profitable consumers there.
European demand is subsiding, however, so the Wii should become more readily available here in the U.S.
Via: Kotaku
Comments
Gift.
Oh and 1AgainstTheWorld, that's true for the 360 and PS3 but apparently the Wii sells for profit. Nintendo must be feeling pretty chuffed about that. :D
Gift.
I know way too many people with Wiis that don't play with them, they just sit there in living rooms, and far too many are on eBay still. I'd hoped to get one a while back, but still no luck.
Interestingly enough, the Wiis on eBay seem to be going for barely more than the price in stores.
In fact, one friend will be showing me the newest version of Smash Brothers this Saturday...
1.) CAD dollars haven't been above USD for very long.
2.) CAD dollars are still lower than Euros, pounds etc. It would still apply.
I still don't know if my friend would of actually bought one or not.
Actually, if the console race was all about profit rather than sales, Nintendo have been #1 for a long long long time, even with the N64. Their market share took a nosedive but their ability to make a product that records a profit from day 1 remains true.
As far as European shortages are concerned, the UK is a bit of a blip as we buy more games and consoles than other EU countries per capita. Over Xmas there were shortages, but around the 14th-18th of December there appeared to be a huge shipment that arrived that sated most parents. Shrotly after the new year we have an abundant amount of them in shops and have done ever since (ironically the DS was sold out for much much longer). I also happen to know that Italy had tons of Wiis over Xmas as a friend of mine bought one for his parents in Rome.
Given that there doesn't appear to be that much of a shortage problem these days, I would imagine the US can start to see the shipments sooner rather than later. Profit, albeit a smaller one, is still profit and Nintendo aren't going to turn down sales in the US.
*note* if theres more than 20 people in the line, its probably a lost cause since from what I've seen most places only get 13-20 Wiis anyway. This guide need not apply to people that can pull strings and get their buddies to hold one till you get there *cough*me*cough*
But overall though, I'm fairly unimpressed with the Wii. Yea theres a few gem games out there (Brawl, Metroid Prime 3, No More Heros) but the majority of the systems games are dominated by the casual market and marketed to people that don't know a GREAT game from a Poorly made game. Casual system, marketed to casual people, produces casual developers, which means less quality since the developers don't need to please the ones that have a better eye for quality which, in the case of the Wii, are the minority.
Metropolis - Nintendo could do some digital distribution and cut out the middle men but I couldn't see how that would be good for them besides increasing profit per machine sold. I believe it would ultimately decrease their sales though so it might actually be harmful to them. The reason I say that is I believe it would harm the relationship between Nintendo and the retailers that sell their products in stores. So sure they could do some digital distribution but you have to compare the risks and rewards carefully. I say stick with the retailers because the risks far outweigh the rewards.
I wouldn't stress too much about getting a Wii. You'll get one eventually.
Profit is Sell - Production Cost. (labor and all that fun stuff)
Pure Profit being all the money that is left over from covering costs of making the system.
Just saying "They made profit y0!!11oneone!2" doesn't mean much
It's pure profits, paying for the overheads and production costs can hardly be counted as profit. Why would it make any difference though? Shareholders deserve a return on their investment and future console development needs to be paid for with profit.
I don't think Nintendo are price gouging if that's what you mean, the consoles wouldn't sell as well if that was the case.
Gift.
Gift.
In case he's talking about dollar value falling over time, that wouldn't be much of an issue, since I'm sure a large company like Nintendo would be hedging that sort of risk.
I figured it was pure profit, but at times people do just say "They made profit" when in reality the profit they're talking about is just enough to cover overhead.
As far as the Wii goes I think it's honestly a forced demand, why produce more than enough consoles when you could make 1000's at a time and wait till they're all bought up before sending out more. It's a smart way to protect the profit margin even if it irratates costumers.
The word "profit" means the net of revenues and expenses. It's not "profit" if it's still covering costs. In that case, the word you're looking for is "revenue".
Thats true, but todays society we now use the same word to mean to many diffrent things. The same word means diffrent things, like Tack's "First Admendment Attorney" He sues everyone's right to free.
Out of curiousity, I'd love an explanation of the logic involved with the Federal Reserve. Because, I'm not even sure about my opinion since I'm just trying to go after the easiest target in the economy.
This seems to be as accurate as my father's conspiracy theory that Nintendo does it on purpose and sells them on Ebay themselves, despite selling more in stores than the other two.
But then I trust Pachter's analysis about as much as I trust Jack Thompson's 1st Amendment expertise. I think Pachter gets more media coverage than his accuracy deserves. He always seems to have some media grabbing analysis coupled with an industry shocking prediction.
Have a look at his website www.wiiforonedollar.com
it will be shipped to you free of charge!! (within the US / Canada)"
I registered!