Given that strong position, retailers are providing us with tremendous support. Retailers view the Wii and the DS as a way to draw more consumers into their stores. They are using it as a loss leader to drive traffic. This week, for example, Target is selling the DS for $125, when the normal price is $129.99.
What measures has Nintendo taken to prevent a shortage of Wii consoles this holiday?
Nintendo has continually raised the production levels of the Wii hardware. We're now producing 2.4 million units a month worldwide. Last year, we made 1.6 million a month. So we've made a 33% increase. One of our competitors projects they will sell 10 million consoles worldwide this year. For us, that's three months of production. We're producing an unprecedented level of hardware to try to meet demand.
The Wii Fit has been out nearly five months, but it continues to be in short supply. Why?
I was in our New York Nintendo World Store last Tuesday, and there was a line of 40 people. Every single one of them bought a Wii Fit. We know the demand continues to be very, very strong.
At this point, only about 3 in 10 stores will have Wii Fit in stock. We are dramatically increasing shipments of Wii Fit. We've sold somewhere around 3 million units. The demand has been so brisk that it has been difficult to catch up. The other challenge is that we're seeing demand from a whole new market. Of the people who stood in line in New York, 60% were working women. This is a demo that arguably has never bought a video game, and they're buying it for themselves.
With a nontraditional gamer as your primary consumer, are you seeing a different sales pattern?
The typical industry sales curve has a strong ramp up in the first month or two that then drops off. Our products ramp up and sustain sales at high levels over long periods of time. New Super Mario Bros. for DS [released in May 2006] is still selling at a strong pace. Most video games that old would no longer be stocked by retailers. This is a major paradigm shift in the industry.
Any advice on scoring a Wii this holiday?
Look at retailer circulars. Go to their websites. We're flowing products into stores on a very regular basis. Once you see it on the shelf, you ought to buy it. While we're bringing 50% higher level of supply into the market this holiday, we don't know if the demand will be even higher than that.
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alex.pham@latimes.com
