Foxconn production: Not enough for Wii, plenty for PS3?
by Kyle Orland 
{ Apr 11th 2007 at 6:25PM }
Taiwan's DigiTimes is reporting today that Foxconn Precision Components is set to "begin volume production of PS3 in the second half of 2007 in order to meet strong demand in the upcoming peak season." Foxconn, Foxconn ... why does that name sound so familiar? Oh yeah, they're the company that sources said had production facilities that were "insufficient to meet persistent strong sales of the [Wii]" a few weeks ago, leading Nintendo to search for additional production partners.So, if we're reading this right, Foxconn has enough additional capacity to meet the "strong demand" expected for the PS3, but not enough additional capacity to keep up with the "consistent strong sales" of the Wii going forward. It's a bit circumstantial, but it's enough to make us wonder just how many systems each company is planning on producing for the coming fiscal year.
Read - Foxconn ready for volume production of PS3 gaming consoles
Read - Shakeups expected in Wii and Xbox 360 supply chains
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Reader Comments (Page 1 of 1)
coyurtney @ Apr 11th 2007 6:33PM
someone should ask them this. I mean more people want a Wii then PS3. Guess they didn't get the memo?
Matters @ Apr 11th 2007 6:38PM
Hmmm maybe I could use my newfound Godfather: Blackhand edition skills to resolve this situation.
andres @ Apr 11th 2007 6:38PM
"there changes in the game console supply chain may be seen for the production of the Xbox 360. With the launch of Microsoft's Elite version, the company is preparing to reduce prices on other Xbox 360 models"
Looks like the 360 is getting a price cut.
Ian Von Porter @ Apr 11th 2007 6:40PM
PS3 price cut on its way for xmas '07.
andres @ Apr 11th 2007 6:42PM
need to edit the "There" to other
Rubang B @ Apr 11th 2007 6:45PM
I think what they're trying to say is that they can handle the demand for the PS3, because it is small, like say, a worm, but they can't handle the demand for the Wii, because it is big, like say, a universe.
Matters @ Apr 11th 2007 6:50PM
what kind of worm
DBX00 @ Apr 11th 2007 6:52PM
Since the parts that go into the production come from several different parties, this simply means that Sony has their supply chain in order to pump the components required for assembly into the Foxconn facility. However, Nintendo still hasn't gotten on the ball to get the components prepared for assembly. Foxconn doesn't manufacture the parts, it simply puts the thing together.
rowd149 @ Apr 11th 2007 6:56PM
I smell pay off. Damn it, guys, get your hands out of Sony's pockets and start making some fucking Wiis.
Rubang B @ Apr 11th 2007 6:57PM
Bigger than a mealworm, smaller than a sandworm.
Mike Morham @ Apr 11th 2007 7:02PM
It's simple, Nintendo have been creating fake desire for the WII by restricting supplies. It's still a must-have console, not because it's good or cheap, because consumers are stupid and can't see the cheap stunt Nintendo are pulling.
The backlash will begin once people realise they have been fooled.
Slaziman @ Apr 11th 2007 7:03PM
strong demand and PS3 in the same sentence? do these people read newspapers?
coyurtney @ Apr 11th 2007 7:08PM
@ Mike Morham, what you buy a PS3 and now your pissed the devs are leaving and going to Wii?
Mike Morham @ Apr 11th 2007 7:08PM
@12
No they don't believe 12yr old fanboys posting on forums..
In Europe PS3 has shifted a million units in 3 weeks. Not too shabby. Global sales are 3.2 million, that's SOLD (not BS Microsoft shipped numbers)....
Piemaster @ Apr 11th 2007 7:09PM
@6,7, and 10, you all win. 11, you lose. Seriously. Lose.
And I wanna Wii =(...
Piemaster @ Apr 11th 2007 7:11PM
@13, BS MS shipped numbers? Have you heard of the PS2? What about all the BS shipped numbers for that? I smell a Sony fanboy.
Julio Nobrega @ Apr 11th 2007 7:12PM
They make more money with the PS3 components... the rest is PR fluff.
coyurtney @ Apr 11th 2007 7:13PM
@ Mike Morham, where do you get this stuff. Everyone and their mother knows Sony is the king os shipped not sold. man, I mean come back to reality.
PS3 will do good someday and someday it will be worth it to own one, but right now it's the Wii and the 360 shining.
wait in the car @ Apr 11th 2007 7:14PM
@11
There's no such thing as fake desire. Either you want something or you don't.
Also, you're forgetting the fact that the PS3 was far more scarce than the Wii at launch. By your logic, wouldn't that mean that consumers should have been going nuts over the PS3, causing the demand to skyrocket?
Hmmm... looks like perhaps being both good and cheap might be reasons to buy something after all.
Rubang B @ Apr 11th 2007 7:21PM
I can't believe Nintendo is holding back supply like this. I can't believe they're ONLY outselling everything but the DS! If Nintendo's going to let their new system get outsold by the puny DS just to make the Wii look "in demand" they've got to be crazy! Why does Nintendo hate money? The DS is murdering them while they hold back supply to inflate this fake demand! Hold on, I have a phone call.
::picks up phone::
Wait, what's that... Nintendo actually MAKES the DS too? So they're making the top 2 selling systems? So there's no competition whatsoever? Combined sales of DS and Wii are more than 50% of game sales so far this year? Oh... oops.
::shuts up::
3lement @ Apr 11th 2007 7:24PM
What amazes me is why Nintendo cant make enough Wiis. Wiis are basically Gamecubes hardware wise and they have been producing them for what 6 years now.
vaylen @ Apr 11th 2007 7:27PM
This just proves Ninty was lying when they said Foxconn couldn't make enough Wii's. Face it, they are creating an artificial shortage. Considering the fun of the Wii fades after a while, I think that's a dumb strategy. You didn't see artificial shortages of pet rocks, rubiks cubes or tamagotchis. They knew they needed to sell as many of those as they could while it was a hot item. Is Ninty's business acumen leaving the realm of the DS and reverting to the realm of the GameCube and the Vituaboy?
Mr Khan @ Apr 11th 2007 7:35PM
They said they lack the capacity to do so, it doesn't mean Nintendo isn't shifting enough units (although that's probably part of the problem) but that Nintendo didn't buy out enough production lines to shift Wiis
My guess is that Nintendo was caught as flat-footed by the Wii's success as everyone else (remember, they just came off the GameCube), and just like the 3rd parties, are scrambling to get resources together to meet demand
Rubang B @ Apr 11th 2007 7:44PM
Nintendo sold over 30 million GameCubes. Nintendo was able to track down and buy back 13 million of those. They duct taped pairs of them together in their factories, and now we have 6.5 million Wiis. That means there are only 17 million GameCubes left. If you want more Wiis, you must sell back your GameCubes! LOLZ!!!!!!won111
But seriously, comparing Wiis to GCs is old and busted and doesn't make sense. But comparing Wiis to pet rocks and Tamagotchis was just amazing.
If we get some REAL numbers from Microsoft that show how far under 10 million they really are, Wiis will outsell 360s worldwide in just a couple months. Then you can keep whining about the supply issues after Nintendo did in 8 months what Microsoft couldn't do in 18.
john @ Apr 11th 2007 7:45PM
Nintendo needs to take a page from MS and Sony and raise the price of the Wii.
why not the LS2/LS7? @ Apr 11th 2007 7:49PM
It isn't like Foxconn can build Wiis on the PS3 line.
The only thing shared between Foxconn lines is the labor.
Right now the Foxconn iPod lines are running very slowly too (sold something like 24M in 4Q, something more like 8M in 1Q), and all Foxconn does is just hire fewer workers (who are hired on a day-by-day basis), but leaves the line set up and ready to roll.
I guess what I'm saying is that it's very possible Foxconn could have enough capacity for PS3, even if PS3 were projected to outsell Wii (fat chance!) and still truly not be able to make more Wiis. This would be because the Wii plant isn't big enough to house enough lines even if they could get the people to work them. Or it could be N can only get so many of a component (perhaps the CPU) a quarter anyway, so no matter how many lines they had, they couldn't make enough Wiis.
Llenlleawg @ Apr 11th 2007 7:53PM
"21. What amazes me is why Nintendo cant make enough Wiis. Wiis are basically Gamecubes hardware wise and they have been producing them for what 6 years now.
by 3lement"
Bad move buddy.
So your saying that the Wii's 729 MHz is the same as the GCN's 485 MHz CPU. That the 243 MHz Wii GPU is the same as the 162 MHz GCN GPU. That the Wii's 91 MiB RAM is the same as the GCN's 43 MiB. Not to mention the lack of internal memory in the GCN as well as the basic OS...
LongshotX @ Apr 11th 2007 8:02PM
Well I can understand #21's viewpoint when most of the games on Wii, well actually all of them released thus far look like they could have been on Gamecube just without motion controls. I mean I understand the Wii is spec'd a little differently but generally speaking there doesn't seem to be a large improvement over the Gamecube other than the fact the Wii has motion controls, a better OS, and the Virtual Console. Taking just a few of those things away and I can understand why some people view the Wii as two duct taped Gamecubes.
Tufas @ Apr 11th 2007 8:07PM
Lienlleawg: What 3lement is saying is the technoloy behind Wii is 6 years old. I'd go further and say its at least 8 years old. There is no way, at all, componets are scarse. At all. This is a simple fact of marketing by Nintendo = hot item: less supply: more demand, and more, and more, and more.
I have a Wii gathering dust for 4 months now. Piece of plastic crap.
arrrgh @ Apr 11th 2007 8:15PM
"29. Lienlleawg: What 3lement is saying is the technoloy behind Wii is 6 years old. I'd go further and say its at least 8 years old. There is no way, at all, componets are scarse. At all. This is a simple fact of marketing by Nintendo = hot item: less supply: more demand, and more, and more, and more.
I have a Wii gathering dust for 4 months now. Piece of plastic crap.
Posted at 8:07PM on Apr 11th 2007 by Tufas"
Way to have no fuckin clue what you're talking about guy. ATI(AMD) built a brand new GFX chip for the Wii for starters...and NAND memory aint exactly old or dirt cheap
Rubang B @ Apr 11th 2007 8:18PM
Can somebody answer this? If Nintendo is holding back supply, what does that say about Sony and Microsoft? If you honestly believe that Nintendo is holding back supply of Wiis, then you honestly believe that the 360 and PS3 are selling so poorly that they can't even compete with some duct-taped GameCubes with supply issues? What's your argument here exactly? It's more of an insult to Sony and MS than it is to Nintendo. The only people who should be whining about Wii supply issues are the millions of people who can't find them yet.
Korben @ Apr 11th 2007 8:25PM
While my Wii hasn't been gathering dust as long as Tufas's (2 Months) cause I took my sweet time with ZTP. I think this blog entry assumes too much. But people do love to speculate. The backlash from some of the decisions Sony has taken on the PS3 (Price Point for example) is that lots of people want one but can't get one. I for one don't think it's all that expensive but the average gamers is a bum so... you get the point. Guess I'm just not an average gamer. Don't get me wrong I'm no rich person, I just did this little thing known as "save money," Then again the PS3 did come out of nowhere so some people maybe didn't know to save [sarcasm].
orange.micro @ Apr 11th 2007 9:26PM
finally other ppl admitting that their wiis have been getting as much playtime as a 30 yr old marriage. there just arent enough quality titles out on the wii. ppl have gotten tired of wii sports and zelda. the charm is quickly wearing off to those that actually own a wii.
Mr Khan @ Apr 11th 2007 9:29PM
@ Rubang B
GameCube only sold about 22 million, 14% marketshare compared to Xbox's 24 million and 15% marketshare, really they were neck-and-neck at the end, but since most of those GameCube sales were from outside of North America and most of those Xbox sales were from North America, the GC is considered much more of a failure here
You can't call yourself a winner in second place if you're still 85 million units out of first and $6 billion in the hole, both consoles were equally suckish against PS2...
btw dude, take my Wii number and confirm it, i've had yours on file since that exchange-a-thon back at the 1000 Mii parade video, but there was never a confirmation (damn double confirmation system...)
arrrgh @ Apr 11th 2007 10:18PM
hahaha I think the people that are getting bored with the Wii were either just kidding themselves thinking it was for them, or just don't have any friends. It gets more playtime than even my DC did when I got Shenmue and MvsC2 on the same day :)
Maybe you guys just need to smoke
Rubang B @ Apr 11th 2007 10:46PM
Oops. I thought GC and XBox were 32 million and 34 million. What's your friend code? I could've sworn I put them all in.
samfish @ Apr 11th 2007 10:59PM
"I guess what I'm saying is that it's very possible Foxconn could have enough capacity for PS3, even if PS3 were projected to outsell Wii (fat chance!)"
You know, I never thought about it before, but the expression 'fat chance' doesn't make sense.
If fat=big, than wouldn't 'fat chance' translate to 'big chance'?
Uh huh...yeah, that's right- you all think about that for a while...
More on topic, I don't think Nintendo is holding supply back to create demand. They've repeatedly said their production is working at it's max and they've apparently beat their 6 month sales totals goal for the Wii, already.
I DO, however think that Nintendo, being the bunch of cheap skates that they are, aren't exactly looking to shell out for new suppliers.
Iridium @ Apr 11th 2007 11:39PM
3. "there changes in the game console supply chain may be seen for the production of the Xbox 360. With the launch of Microsoft's Elite version, the company is preparing to reduce prices on other Xbox 360 models"
Looks like the 360 is getting a price cut.
--------------------------------------------
Microsoft might want to reduce the price but to reduce the price that means that they have to reduce the price they pay. Thier suppliers don't want to sell for less since that means less profit for them. Since 360 components are about as cheap as they can get theres no other way to cut costs other than using even shoddier labor and quality control. A $100 retail price drop requires a $100 drop in manufacturing cost when the manufacturing cost equals the retail cost, as it does with these consoles or the parent company is going to eat the cost. There simply just isn't $100 of cost reduction in 360 production. Now the suppliers can build a 360 and sell it for nothing so Microsoft can make money, but why would they. Thats MS's problem with production right now.
PS3 production offers the greatest profit incentive for suppliers because of its high component cost. Making PS3s brings in more profit per unit. With production thats all you care about. You aren't going to remove production capacity from somewhere you are making money to make a part you make less money on. That just wouldn't make sense.
The problem with the Wii isn't the system itself, its the controller. The system is sold for a profit to make up for the loss in Wiimote production. That is where the shortage is. The Wii needs to be sold with a Wiimote and nunchuck packed alongside the little white box, all for under $150 probably. Pretty tough unless you are in volume production. Nintendo didn't plan on moving into volume production so fast. They were unsure of the Wii's success so they didn't want to buy up the needed part and production capacity in case the Wii was a flop. Doing so would have cost Nintendo millions, not something you want to do unless you are pretty sure of success.
Sony planned on entering into volume production very quickly, risking the stake of the entire company on PS3 success. The production and part supply were disrupted causing delays and shortages, however the preplanning allowed for production to ramp up very fast to meet demand. Where Nintendo cannot produce enough units to meet demand Sony is able to and will continue to be able to.
Sidepocket @ Apr 11th 2007 11:47PM
Two things:
1) I remember when 360 launched there was a huge complaint on how 360 games look just like high-rez X-Box games. Boooo! Then Gears of War came out A YEAR later...nobody complains now. Just give them SMG and people will shut up.
2) Erm, why is your Wii gathering dust? If it is, then you made a bad product decision. Why not do what any normal consumer electronics do and get your recete and trade it back for $$$ or sell it?
Shit, if I accidentaly buy a TV that did not meet my standards I would return it, get a better one and be happy. But here we are, most of us grown people, and we let ourselfs make bad purchase and just complain about it like bitches.
...
I now understand why we have Jack Tompson torture us, its punishmet from god for gamers being such brainless fucks.
j.lee @ Apr 11th 2007 11:54PM
This isn't about Nintendo holding back supply or even about Foxconn not being able to "meet Nintendo's demand." This, like all things with the Big N, is about the bottom line. When Nintendo says they've "maxed out production," the only thing that means is that they've maxed it out at a level that they're willing to PAY for. I don't doubt that if they really wanted to, they could easily push it up by a few more million units, but all that extra production translates to less profit for the company. It's not that they aren't aware of the demand, they just are more aware of what it means to their account.
And yes, I own a Wii, and yes, it's the only current/next gen console I own. Does that make me thrifty or a good capitalist for supporting a company whose primary concern, above all else, is profit?
orange.micro @ Apr 12th 2007 1:00AM
as for the wii gathering dust, i will not return it. i have no choice but to wait for good titles like metroid like i did back in the gamecube days. what were seeing is an omen of things to come for the wii. it will be a repeat of the gamecube drought where we will only get 1,2, or 3 if were lucky good games a year. while the worshippers declare all good in the land of nintendo as they preach about crappy games like animal crossing and baten kaitos while the rest of normal ppl suffer because we refuse to bow at the altar of nintendo and worship a fallen idol.
Rubang B @ Apr 12th 2007 1:57AM
Dude orange.micro, chill out. Try some 3rd party games. I have 2 Nintendo games, Wii Sports and Zelda. But I also have 7 third party Wii games. Most of them are good. Just go to Metacritic, list the Wii games by score order, and rent some of the top ten. You'll probably like one of them.
Cuja @ Apr 12th 2007 2:55AM
Nintendo Wii numbers is what's in question. Nintendo is cheap! Fake! And overpriced.
steve17 @ Apr 12th 2007 3:00AM
#40 hit the bulls-eye here.
thats exactly what it is. nintendo could easily make these things in the trillions if they wanted to. (i mean come on, anyone who says they are harder to produce than ps3's and 360's needs a swift kick to the nuts) but ninty wont do it cause it means less profit to recruit more lines into production.
.........which pisses me off. after all that has unfolded in this current console war ninty is the only company making money hand over fist on EVERYTHING they sell. whereas MS and sony are taking losses (360 recently started making money) just to deliver their products at prices that dont include your left testicle. imagine paying full production cost for ps3($840+change) and $600 doesnt look quite as bad.
at the same time ninty is making some $80 per wii. which isnt a lot but it puts things in perspective
___________bottom line_____________
ninty is CURRENTLY doing the best in numbers compared to time in the market. and especially money!!! so MS and sony are cutting themselves off at the knees for the customer and nintendo cant even do the decent things and take a tiny loss just to supply the customers who are eagerly waiting for a wii.
whatever you cut this with, there is no way around the fact that ninty is a being a filthy pirate hooker this time around!
Burnt Meatloaf @ Apr 12th 2007 6:05AM
*j.lee: "I don't doubt that if they really wanted to, they could easily push it up by a few more million units, but all that extra production translates to less profit for the company."
Yeah, because the profit they get from the hardware isn't enough. They have to sell rubber grips seperately and charge $30 for an S-Video cable. Profit on system hardware reduces the prices of other components? Nah! They charge whatever they can get away with.
Of course Nintendo is not meeting demand. They have a single, tiny factory trying to supply the whole world. And still, their corporate image in invincible. I wish I had Nintendo people for customers.
No, wait... I take that back. I don't want those kinds of headaches.
Todd @ Apr 12th 2007 9:53AM
hypocrites.
Psaakyrn @ Apr 12th 2007 5:46PM
to #44 steve17
Would you sacrifice your morals to make others happy? Remember that the sole purpose of a company is to make money, not to make others happy. Just because other companies are willing to face the wrath of their shareholders, doesn't mean that Nintendo should do it too.