
Nintendo of America's Prez adds some perspective.
December 14, 2007 | 10:24 AM PST
8am PDT, December 14th. A cunning ploy to catch the press unaware at such an early hour? Nah. Just the first(?) stop in yet another busy day for Nintendo of America's President and COO, Reggie Fils-Aime, as he conducts a conference call to address the issues of Wii stock through and after the holiday season.
Of course, it took place at a little after 11am on this side of the country, allowing us to oversee things with sharp precision and cunning eyes not unlike an eagle. That, a can of Pepsi, and an open Notepad to see us through.
Reggie began things by welcoming and thanking us for joining him at this early hour. No doubt there were comments made about that, but they were muted and so don't matter anyway.
From there, he recapped the success of sales which the Wii has enjoyed, reaching many millions of systems sold in just over a year's time. He emphasized that while they went into the console's launch expecting it to perform well by any standard set by themselves or other manufacturers in the history of the industry, and instead found themselves "writing a new chapter in the book."
They began with manufacturing a million units per month at launch, and have increased production twice, reaching 1.8 million per month, nearly double their output when they started. Despite this, the Wii continued to sell so well through the summer that they were not able to make the traditional stockpiles of the system to prepare for the holiday season. As of now, they're still trying to understand the upside of the demand consumers have for the system. "There's no way to know when we'll meet demand until we've met it," Reggie said.
He added that so far, the majority of those purchasing the system are core players, those who are willing to get out and stand in line in the freezing cold of the morning just to get their system. This means that, even with the various reports and coverage of retirement communities and other people enjoying the Wii, they've still only reached the tip of the iceberg for the expanded audience.
Asked if there was any skepticism from within Nintendo at the prospect of going after the older age groups, Reggie said that they received encouragement early on from retirement communities, who saw it as a good way to socially interact, among other things, and that the various reports and pictures from websites and retirement communities have justified this, showing the ease of access and that the pick-up-and-play nature of the product is broadening their range.
The question of "why not make more?" has come up, and Reggie's answer was quite simple, but makes perfect sense: production of the console Depends on components from a wide array of suppliers; if one can't increase their capacity, we can't increase ours." In other words, there's more to "supply and demand" here than just Nintendo and its customers.
In the meantime, they have tripled work capacity at their facility in Washington, though the actual production of the units themselves will remain in Japan, due to reasons Reggie would not fully disclose, but summed up as involving "proprietary techniques" used for security and to combat piracy. He still strives to get as much product here as quickly as possible, but there are no plans to shift the number of consoles produced in either direction at the moment.
The big news for consumers, however, is that Reggie has announced an initiative taken with GameStop (whose own press release should arrive later today) to allow rainchecks to customers that will guarantee that if they are unable to secure a Wii before Christmas, they will be able to get one in January. Tens of thousands of these rainchecks will be available on the 20th and 21st of December with a full payment, while supplies last. With rain check in hand, the customer will have until the 29th of January to make good on claiming their secured purchase.
Of this program, Reggie says that it's "a great way for consumers who desperately want a Wii to have something to put under the tree, guaranteeing a Wii in January."
As to why GameStop is the only store engaged in this promotion, Reggie explains, in an ironic twist, that it's best suited to their chain of stores due to the tools they've created for their presale programs: "A certificate needs to be matched to a specific Wii which needs to be matched to a specific store. Only this retailer has the ability to pull off such a program."
In the meantime, Wiihunters will want to check out many of the big box stores such as Best Buy, Circuit City, and others this weekend, who will be promoting the Wii in their fliers.
In terms of the rest of North America, such as Canada and Latin America, Reggie noted that he's been charged with arranging allotments of consoles to these regions as well, where demand has been the same, but with different seasonal demands to work around, such as no November Thanksgiving/Black Friday in Moosetown, or the upcoming All Kings Day south of the border, which is another big gift-giving holiday for which he tries to help as many consumers as possible get product.
One question pertained to Nintendo's allotment of systems to retailers, and if Nintendo has considered selling only to big box stores that won't mark up the MSRP, vs. more "boutique" styled stores that would.
Reggie says that there is no program, and that it would be illegal to have one which fixes prices on the upside. "We are always disappointed if we see retailers pricing Wii or products above MSRP, and the only way we can combat that is by not rewarding those retailers with an excessive supply of product. Roughly 90% of profits are from top 10 retailers in any market around the world, where those retailers have consumer oriented programs to ensure reasonable prices, and that customers are not being gouged."
Regarding software and accessory sales, Reggie assures that the "attach rate is increasing, and we expect it to increase over the life of the system on games. As for accessories, we are enjoying the sales of Wii remotes and nunchucks, and the Zapper is performing very well, and we are deploying additional resources to get more in market. Though it's out of stock right now, it will be available before and right after the holidays. We are also quite pleased with the initial results of Wii Fit in Japan, and look forward to launching it in the spring, as we previously announced."
He also mentioned that they are quite pleased with the sales of Super Mario Galaxy so far, citing its 97.whatever rating on Metacritic. Regarding third-parties, they "understand what Nintendo is doing to get systems into hands of consumers, and they understand that we are selling systems at an unprecedented sales pace. Publishers such as Activision, with Guitar Hero III, and SEGA with Sonic & Mario, are satisfied.
One question which Reggie was faced with regarded the issue of the quality of the games being released for Nintendo's platforms, and if there was any sort of certification process in place to help eliminate "bad" games.
"In terms of quality of software, on any system there will be a range of quality. Publishers are working hard to take advantage of Wii and its abilities, to incorporate its remote and nunchuck into gameplay. Those who do a good job enjoy fantastic sales, and the quality shows, such as in the case of Guitar Hero III. As understanding of the technology grows, better advantage will be taken of it over the life of the system.
"In terms of certification, publishers need to conform to a number of key aspects for publishing, but there is no filter in place for quality, as it is subjective. We are working hand-in-glove with publishers to share knowledge and expertise to make the best games possible, and so the games should improve. There was concern early on in DS lifecycle that third party titles weren't as strong as those made by Nintendo, and now we have very strong high quality titles from our third parties. It just takes time for publishers to understand all of the capabilities of unique hardware like the Wii and DS."
Speaking of the DS, as so many people often are, Reggie informed us that there are no reports of shortages of Nintendo's handheld yet, though inventory could get tight around the 24th of the month. But, any consumer who wants a DS should be able to get their hands on one.
To conclude, there was a little off-topic questioning regarding the online capabilities of the system. Asked about the possibility of online voice chatting for the Wii, Reggie noted that they are constantly making updates and changes available for the system. It's capable of supporting it, but simply comes down to finalizing the peripheral that would allow one to speak during gameplay. Plus, the existence of the DS headset already shows that they are interested in such a feature.
The other inquiry regarded the possibility of online play for Virtual Console games, to which Reggie replied that "our approach has been to leave legacy games alone, and not perform any significant upgrading of the core game as it's made available. We did make an exception in Pokemon Snap, but do not anticipate making online play available for Virtual Console titles."
source: Nintendo
















