Nintendo to pull advertising in the wake of Wii shortages
by Scott Jon Siegel 
{ Dec 7th 2007 at 3:53PM }
The UK-based Times Online reports that Nintendo plans on moving some of its already-scheduled Wii advertising to early 2008, citing unprecedented demand for the console as the main factor in its retail vanishing act. It's the same story we've heard before -- that Nintendo is working at full capacity, pumping Wii's out as fast as possible in order to sate the insatiable consumer demand.
Pulling advertising, however, is an entirely new move. A Nintendo spokesman told Times Online that the ads were being pushed back to 2008 in an attempt to "act responsibly." Charles Dickens would be proud.
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Reader Comments (Page 1 of 1)
daedalus @ Dec 7th 2007 3:57PM
IT WASTES MONEY!!
Kun Hitori @ Dec 7th 2007 8:19PM
Actually...
...I'd say that with how much of a profit it pulls in, it probably evens things out.
DangerMouse @ Dec 7th 2007 3:59PM
Makes sense. If they're going to sell out, why put money in advertising something that's going to sell so much.
bnpederson @ Dec 7th 2007 4:01PM
Yeah, this seems much more like a cost-savings measure by Nintendo than a responsible action to help the consumer. If you're going to sell out anyway why bother advertising? Instead use that money to advertise and increase the sales of other products.
Mr Khan @ Dec 7th 2007 4:08PM
Yeah, like they could run TV ads for games other than Galaxy (i say TV ads because they had a good campaign for Radiant Dawn canvassing gaming sites and some magazines)
cynic @ Dec 7th 2007 4:03PM
I wonder whether they just had some uninspiring creative that they killed and thought to themselves, "ooh, we could spin this as a corporate responsibility thingy to help support our wii scarcity story, while we're at it!"
That's what the cynic in me wonders, anyway.
Fatass of Kickassness @ Dec 7th 2007 4:06PM
Hate to make myself a blighter but the cynic in you is likely spot on.
TheCassidy @ Dec 7th 2007 4:07PM
Why?
Because selling out is better advertising than any TV spot.
rv @ Dec 7th 2007 4:14PM
Wow, I guess thats a smart move if you dont have enough supply. If I were nintendo I would divert a lot of stock away from Japan to the US and Europe for christmas.
mafafu @ Dec 8th 2007 9:11AM
They had to give Japan some stock recently to support their Wii Fit launch.
cc123 @ Dec 7th 2007 4:16PM
I agree that pulling some ads is OK when the product is going to sellout anyway, BUT please don't try to tell me that it was done out of corporate responsibility.
Nintendo is ridiculously cheap and this is a cost cutting measure. Thats all.
vidGuy @ Dec 7th 2007 4:19PM
They should be putting less money into advertising the console (and Wii Sports) and should be dumping all of that cash into ads for their games. It'd also be cool if Nintendo would help finance ads for third party offerings that deserve more recognition and sales, like Zack and Wiki.
It's pretty good for Nintendo in the US though. Even at $249, there's probably another 5-8 million in demand. Then when the price drops to $199, oh man!
xFenixKnightx @ Dec 7th 2007 4:29PM
To quote the "Ese" from the movie Training Day........
"This is some freaky ass shit holmes!!"
michael @ Dec 7th 2007 4:35PM
i'm pretty sure it's not a cost-saving decision. from what i understand, they aren't cancelling any commercial spots they've already bought, they're just airing ds commercials instead of wii commercials in those spots. so it equates to more ds promo but not less $ spent. which is not to say that it's completely motivated by wanting to do the right thing or whatever; i think they're doing it to avoid overexposure and backlash from angry parents whose child freaks out during every wii commercial. regardless, it's smart.
James @ Dec 7th 2007 4:38PM
Christ the Wii is popular.
I'm still chuffed that I got mine 1 month after launch. It's been near impossible to buy one here, the shops get plenty of stock but there are constant morning queues for them.
Just give us stars to points plz.
Undead Priest @ Dec 7th 2007 5:13PM
Starting today in Europe, you can convert Star Points to Wii Points.
250 Star Points = 62.5 Wii Points.
Geist @ Dec 7th 2007 10:34PM
Damn you Europeans and your star points. It's like Nintendo is all "Man, we're being unfair to those crazy Europeans. What can we do to fix this?"
WorMzy @ Dec 9th 2007 4:50PM
They could stop being unfair and actually let us have games at a reasonable time..?
Mr Khan @ Dec 7th 2007 4:44PM
The shortages are definitely doing more harm this season than last, but they can't really complain, since they're selling at record rates and beating the competition soundly
monkeymonkeymonkey @ Dec 7th 2007 4:50PM
Can someone please explain why Nintendo cant open another factory up in China to make more Wii's? S
vidGuy @ Dec 7th 2007 4:59PM
Basic economics shows that doing so would be a huge financial disaster for Nintendo. The investment in opening new factories would outweigh the marginal revenue that would be obtained by selling a few thousand more Wiis a month. Nintendo is doing the right thing here, business-wise.
Of course, if they wanted to eliminate the lines they could easily raise the MSRP for the Wii. At $499, how many people do you think would be rushing into stores looking for a Wii? This would allow them to constrain demand to be more in line with supply and to capitilize on the consumer surplus (the extra value consumers place on the Wii above its market price), instead of letting second-hand sellers make that money. But that's not really a PR-friendly move.
So, the situation we are in is pretty much the best possible for Nintendo, and any move they would make would eliminate profits and/or hurt them in consumers' minds.
vidGuy @ Dec 7th 2007 5:05PM
I should include that if Nintendo believes that demand will be consistent enough to need that extra supply long enough to pay off the factory investment, they will do it. But generally, we don't expect Nintendo to NEED a million+ unit per month production capacity much longer, do we? That's the difference. They can't look just at the current situation but what the smart decision is for the next 4 or 5 years.
Earl @ Dec 7th 2007 5:09PM
Wasn't this "fad" supposed to die down 6 months ago?
ComicShaman @ Dec 7th 2007 5:32PM
The "fad" talk is, I think, off-base. The Wii is an unexpected success story, and given the start-to-finish development time for quality games, it's not surprising to see a lull in good 3rd party titles for the machine at this point in time. Nobody realized that it was going to be such a phenomenon, so developers are scrambling to catch up. I think the era of old ports and shovelware will end sometime in 2008 when the efforts of 3rd party developers start to pay off.
But the install base is huge, and it would be insane for developers to ignore it.
The Wii has created a very odd schism for 3rd-party developers. It's not really suitable for multi-platform ports in the current generation -- by the same token, the 360 and PS3 can't receive comparable ports of games that use the Wii's unique controls. This is going to make it challenging for companies that thrive on multi-platform releases.
Interesting times.
jsn @ Dec 7th 2007 5:48PM
It is a fad, but I don't think anyone expected it to die off that quickly.
Silent Xenocide @ Dec 7th 2007 6:09PM
Isn't this still a fad?
TheCassidy @ Dec 7th 2007 5:15PM
What's the word on the street regarding the stock of the new Chintendo Vii?
You just KNOW some soccer mom is going to go to Chinatown and wreck little Jimmy's holiday.
Anni @ Dec 7th 2007 5:25PM
I'd say that even if low on supply the Wii still needs to retain media presence, but.. primetime news has pretty much had them covered for a while.
Quix @ Dec 7th 2007 6:22PM
B..b..but I thought you could just walk in and pick up a Wii off the shelf on launch day...OVER A YEAR AGO!
Nintendo smashes the haters once again. That said, how about buying a few more factories already, Nintendo?
LaughingTarget @ Dec 7th 2007 6:47PM
I think Nintendo should work on developer relations and actively advertise a few third party games.
B1gC72 @ Dec 7th 2007 6:53PM
does this seem to debunk the whole "Nintendo is staging the shortage to increase demand" thing for anyone else. i already have my Wii so im good but i was skeptical for a little bit.
Paviel @ Dec 7th 2007 8:04PM
I'd say that common business sense (e.g. Money now is better than money later.) would debunk those theories.
I agree with you, though. If there was any chance that the Wii situation could have become a "bait and switch" issue, Nintendo is doing pretty well at cutting back on the bait.
Of course, in my current state of paranoia, I see Nintendo trying to cover its collective behind for exactly that reason...
FM @ Dec 7th 2007 8:11PM
A nice profit on ebay huh?
OldElvis @ Dec 7th 2007 8:31PM
I agree that it seems like a waste of Money, I was actually surprised that Sony did it last year with the PS3. I can't understand why the US Postal Service advertises either, it's not like you have a choice...
LaughingTarget @ Dec 8th 2007 9:15AM
UPS
FedEx
E-Mail
The three biggest competitors to everything the US Postal Service does.
Mr. Pibb @ Dec 7th 2007 10:05PM
OH MY LANTA YES
Coming from someone who works at a game store and gets asked every 2 minutes whether we have "THE WII GAME" in stock, it's good to know they're not oppressing consumers with reminders that their product is nigh impossible to find.
Thanks for the mercy, Reggie..not that it's gunna help much...meh
Geist @ Dec 7th 2007 10:37PM
Hey I was just wondering, do you have one of those 'Wii' gaming computers in stock?
Geist @ Dec 7th 2007 10:42PM
You see, my grandson was asking for one of these, and he likes those video game things.
gst @ Dec 8th 2007 1:26AM
I would really like to see Nintendo improve their relations with third-party developers and put a little money into advertizing in that respect. However, I am going to bet that the attach rate for the Wii is not that high for most people (because there are a great deal of more casual owners) and that the games that end up being bought are mostly first party anyways. Since Nintendo is actually making money on the machine itself, they technically don't need to sell any games to make a profit.
They may not really be interested in answering the call of the gamers who want better third-party support. Sure, some of the currently skeptical gamers out there would buy the Wii if there were stronger third-party offerings, but I get the idea that Nintendo's silent philosophy, or at least what they are telling themselves, is that Mario, Metroid, Zelda, Smash Bros, Mario Kart and their first-party brethren will eventually win most gamers over.
Furthermore, if they really wanted to capture the core gamer market, they would need a huge turn around in support from other developers in a variety of genres (ok, I lied, they would just need some really solid FPSs with great multiplayer and a single solid JRPG). In that case, the marginal benefit just might not be worth the effort considering the sales that they are pulling in already just by marketing casual games and their first party offerings.
The only absolute reason that I could see for Nintendo to really pursue third-party support is if they wanted to achieve complete world domination, but, by my count they will probably wait until at least 2009 to start taking over countries by force. For now, they are having no trouble making a profit while all but ignoring a large subset of gamers.
Cuja @ Dec 8th 2007 2:52AM
I've seen people make $600 purchase on ebay for a Wii plus 14 games and extra controller, when in fact all they got was a Wii with Wii Sports (5 events) and Wii Play (9 mini games and controller). When stupidity rules, this is definitely a fad!
AirIntake @ Dec 8th 2007 12:35PM
No wonder the Wii sells out everywhere. Where I'm from, the 360 and PS3 usually come into the store 50-100 on a pallet, each, at least once a week. When the Wii comes in what do they get? 4-8!!! When you're only sending 4-8 units a week to major stores like Best Buy, Future Shop, and Wal-Mart, it must be really easy to sell out all the time. Maybe it's not like this in all locations, but the Wii supply has been a joke in Canada.
vidGuy @ Dec 8th 2007 2:03PM
Yeah, I suppose that's why stores save them up for a big sale - plus they get to advertise the Wii as if it were launching every other Sunday, thereby bringing in more store traffic.
Even so, the Wii keeps outselling the others. Odd.
dillpunk @ Dec 9th 2007 2:21AM
@vidguy
Interesting analysis of the shortage in terms of price and the perfectly competitive market....
first off.. i agree with your ideas about the new factories.. I believe that increasing the supply would not benefit nintendo at this time. It is fairly obvious that nintendo is currently earning positive economic profit... which is impossible in the perfectly competitive market... which brings me to my next point and disagreement with your arguement...
Nintendo does not operate in a perfectly competitive market. Nintendo is a monopolist. They offer a product that is unique in many aspects. Those who want a wii will not accept a substitute of a PS3 or a 360. If this is correct then nintendo will sell a quantity where the marginal revenues equal the marginal cost. The price is set at that quantity by the demand. Earning high economic profit and seeing the low demand for sony's uber-expensive console, nintendo probably feels that they have set the console at the ideal price to earn maximum profit without losing their ability to sell consoles from a price that is too high on the demand curve.
vidGuy @ Dec 9th 2007 7:45PM
Very true that Nintendo doesn't operate in a PC industry. That's not a requirement for my analysis, though.
First, some factual issues.
"If this is correct then nintendo will sell a quantity where the marginal revenues equal the marginal cost."
- A business need not be a monopolist to set output at MC=MR. Actually, all businesses should, especially perfectly competitive firms, where cost structure is the determinent of success.
"there is no consumer surplus"
- Wrongo. There's a HUGE consumer surplus, as made evident by the amount some are willing to pay for the Wii on ebay. Maybe you need to read up on consumer surplus. http://en.wikipedia.org/wiki/Consumer_surplus (wiki isn't always wrong)
So, ignore all of your economic background for a second. If Nintendo won't need the extra capacity that new factories would provide in a few months, and they only expect to sell x marginal units with the extra capcity, and the PROFIT/UNIT * x is less than the amount they would spend on acquire the new factories, Nintendo would lose money on the investment. This is logically the current situation, unless we expect them to sustain a million unit/month demand for the next few years. So, new factories = bad. You don't even need to know what type of competition they face.
dillpunk @ Dec 9th 2007 2:23AM
oh ya... and if nintendo IS a monopolistic firm... there is no consumer surplus... mwahahahaha... god i LOVE econ
vidGuy @ Dec 9th 2007 7:48PM
There would be no consumer surplus if Nintendo EXERCISED ANY MONOPOLY POWER to increase the price to a point at which they capitalize on all consumer surplus. Meaning, if they were a true monopoly they could raise the price to $699 or whatever they are going for on ebay AND STILL SELL THE SAME AMOUNT. Nintendo isn't facing a perfectly inelastic demand curve like a true monopolist does.
Actually, there are other factual errors in your posts but I'll just let that be good enough.