December 3rd, 2006

ronin

Nintendo has no chance of meeting their Revo ship targets. None.


After having spent a second cold morning camping out trying to get a Revo to no avail, I'm pretty frustrated. To give you some idea of the typical way things are going, let me offer this conversation I had with a manager at the Super Target in Superior at about 10:15 this morning:

Me: "Do you have any Wiis?"
Him: "We had some this morning."
Me: "But they're gone now?"
Him: "They were gone at 6:30." (Note: Store doesn't even open until 8!)
Me: "Cool, thanks."

As I said, this is the typical conversation, not an unusual one. The story was exactly the same at the Target in Boulder - people had reputedly lined up pre-7am to get one of the few available there. (Have you been outside in the 6 o'clock hour recently? It ain't warm! These people have some real fortitude!) In fact, the "they were gone before we opened the doors" response and one other, the "we don't have any and we're not sure when the next shipment will arrive" response, is how every single one of my inquiries about Revos have gone for the last two weeks running. At EB Games, where I waited an hour for the doors to open, they had none in a stock and told me to call back a week from Monday.(!)

I don't have exact numbers, but doing some rough estimating based on local conditions leads me to believe that Nintendo has shipped approximately ~650k consoles to the USA since the launch two weeks ago. Do the math - they're shipping an average of ~320k consoles a week. That's impressive, but it's nowhere near the actual level of demand. Now step back and consider the fact that 'Tendo was probably trying to prime the retail pump by shipping as many units as they possibly could in the week or two before the launch, and their weekly average ship rate falls even more.

So now there are rumblings about getting 4 million consoles shipped by Christmas. Again, do the math - that would be 1 million consoles a week, starting tomorrow and continuing for the next three weeks, solid. Given past performance, do you believe that?

I do not. Does 'Tendo really think that by tomorrow they can either A) speed up their production lines by a factor of three and/or B) hire three times as many people to get the work done? No chance. Not a snowball's odds in hell. I don't buy that their current plants are working at 1/3rd capacity now, and no one with any understanding of manufacturing would imply that even a doubling, much less a tripling, of production capacity could happen in a week. Even with all the money in the world, I doubt a doubling of production capacity could be done in a month.


The party line coming out of Nintendo seems to be "I know you can't get a Wii now, but don't worry, we'll have plenty shipped in time for Christmas." Don't believe the hype. Someone in Nintendo management is smoking huge bowls of crack, and buying into their own BS. The thing you need to keep in mind is what Nintendo of America President Reggie Fils-Aime said on Wednesday: "Exceeding (sales targets) is going to be challenging based on manufacturing capacity," he added "We will sell everything we make so now it's simply a manufacturing thing."

Every last Revo made will sell - and Nintendo knows it. Supply is running so far behind demand that scarcity is an absolute certainty - and Nintendo knows it. That tells you everything you need to know. Quite contrary to the happy-ass BS corporate party line, I predict that what we will see in the next three weeks... is exactly what I have been seeing for the last two. About every week, week and a half, a new shipment of approximately 40 consoles will come in to one, perhaps two of your local retailers. All the vouchers for every last one of them will be gone before the store has even opened its doors in the morning. And this will continue at least into the first week of January, perhaps several weeks longer.

Even assuming 'Tendo can keep up the weekly ship rate of ~300k+ a week, they will still be lucky to ship another 1 million consoles by Christmas. 4 million... is absolutely ridiculous.


Nintendo had no idea what they were getting into here. Sales are off the charts, orders of magnitude beyond anyone's wildest expectations. And manufacturing hasn't a fart's chance in a hurricane of catching up in the three weeks left before C-day.

Bookmark this post so you can find these words again come January: This Christmas, it's going to suck to be a Nintendo fan.
  • Current Mood
    Revo Nazi - "No Revo for you!"