The Freakonomics Of The Wii?

We don’t feel so bad that we don’t yet have a Wii, because Dubner over at Freakonomics doesn’t have one and he’s certainly wealthier and more popular than we are. He’s posted a letter from one Paul Kimmelman summarizing the baffling shortage of Wiis. It raises some interesting questions.

For example, “Why hasn’t Nintendo apologized for the shortage?” And, “Why haven’t they ramped up production?” And, “Is this hurting game developers?” And, “Where’s my damn Wii?”

3. Game vendors (including Nintendo) are hurt by this, since their TAM/CAM is held artificially lower. Since shelf life of a game is very much based on release date, this hurts the game developers.

4. It is unclear how much this has pushed sales of XBox360, PS3, PS2, and even older Gamecube devices. Since Wii has a quite different controller design, people are attracted to it. Normally, this would have benefited their competitors a lot according to economic theory.

We got an XBOX 360 instead of a Wii, because, well, we could. And we love it. But we still want a Wii. Sadly, we’re not willing to punch someone’s Mom to get one. —MEGHANN MARCO

We Want a Wii! (Still) [Freakonomics]
(Photo:Michael T. Gilbert)

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  1. cudthecrud says:

    I got mine with after just using some dedication and losing a tad of sleep. Get up when the paper shows up on sun morning (4-5ish), check the circulars, then go wherever has wii’s (as in, maybe get some coffee on the way but be there by 7). It is do-able if you WANT one and not just fancy one.

  2. AcidReign says:

    …..The draw on the Wii is the controller, for sure! It was a blast when the kids challenged me to a game of Wii Tennis. Kids did not know that for my parents, “tennis lessons” equated to “baby sitting.” It was very easy to park the ball right where you want, since the entire hitting process is based on timing of the swing (just like the real game). And then, when I figured out the “rocket serve” (hit the ball at the top of the arc, I was really going nuts! I didn’t lose a set…

  3. JustThisGuy says:

    @AcidReign:

    I now have a mental image of you totally pwning your kids at video games, proceeding to laugh evilly at their ineptitude, and then getting all up in their faces and telling them “THIS IS MY HOUSE!”

    I’m thoroughly amused.

  4. I bought a tote bag for my wii and every weekend I take it on tour. Three days a week every weekend I share this bundle of joy with those who have not experienced the Wii.

    *disclaimer* (I am a total fan-boy)

    I’m willing to go out of town for free airfare. Haha. Or free lunch. Whichever is cheaper.

  5. alicetheowl says:

    My husband and I bought a Wii for his birthday this year, and it’s been great fun. I don’t play video games as often as he does, but we play doubles tennis (against the computer), and I’ve found that the bowling game doesn’t involve the same skills that usually confound me in most games. It’s been incredibly easy to pick up, and very engaging and fun.

    Rarely a day goes by when we don’t turn the console on these days. And we’re not just playing games; the message board feature is very handy for communicating with friends who have Wiis, and there’s news and weather, which I like to check on before I head to work every morning (and it doesn’t suck me in like going online can). There’s also a channel you can download to vote on various topics, and predict how others will vote.

    There’s a plethora of fun little features on the Wii; something for everyone. So I can certainly see its appeal.

  6. Juncti says:

    I don’t think Nintendo should apologize for anything. How would that go? “I’m sorry we made more in 6 months than any other console made in it’s first year, but demand was even higher than that so they’re still sold out”

    Wii is what, 4 million behind Xbox360, and 360 had a 1 year lead. Probably by the one year anniversary of the Wii launch, Wii will have passed 360 as the top seller of the big 3.

    Game developers and consumers need to realize there’s only so many that can be made at the start of a life cycle. On top of that, Nintendo had more at launch than any prior system I can think of.

    It’s not their fault the Wii became the crack cocaine of the video game world, even a drug dealer runs out of stock every now and again.

  7. JustThisGuy says:

    Also: I’m not sure why anyone might think there’s even a hint of controversy behind the unavailability of Wiis five months after the fact. Let’s address the five issues raised in the post.

    1. Nintendo made a blunder in setting up their manufacturing. Not unless one is willing to say that all the major players made a colossal blunder in setting up their manufacturing. Wiis are apparently just simply outselling the others. And as far as being unable to ramp up production within four months: anyone remember the ps2 fiasco?

    2. Retailers are benefiting from increased store traffic. Okay, true. But to suggest that Nintendo might be paying them to not ship the units? That’s ridiculous, because they’d have to be paying A LOT for Nintendo to make up the loss of profits from the units (the only console that actually swings a profit, apparently), the accessories, and the long-term advantage of having a well-established user-base. Nintendo’s a lot of things, but they’ve never ignored the long-term in favor of short-term gains.

    3. Game vendors and developers are hurt by this. Not true, since everyone that releases a launch-title in the six-month window after a console’s release know the risks involved. This might be a valid point if the shortages continue into the next Christmas season.

    4. It is unclear if the limit has pushed sales of their competitors. While it truly is unclear, I’d hazard to say that it hasn’t pushed sales of competing devices, since I don’t believe the devices are actually competing. Nintendo seems to be targeting an entirely different (or perhaps broader) demographic than their competitors. Moreover, I believe that much of the sales might be motivated by the Wii’s significantly lower price point. An analogy: I highly doubt that the person that couldn’t find, say, a Prius is going to shrug their shoulders and purchase a Ferrari instead.

    5. Nintendo has not addressed this issue at all. Given, but it’s generally very hard to get anything solid out of the mouthpieces of the Big N. I’m not going to comment on whether that’s polite, or even a viable business strategy, but Nintendo has historically kept their cards very close their respective chests. Mean? Perhaps. Surprising? No.

    To be honest, it just sounds like someone’s a little bitter over not having their Wii, and I’m surprised that the Freakonomics blog does not acknowledge the strange environment that the video game industry tends to muck about in. Me, I’ll just wait a few years from now when the price has dropped and they work out all the kinks.

  8. alterboy says:

    @cudthecrud: I agree. If you live in a semi metropolitan area then it’s not that hard to find a Wii. I got mine a about 4 months ago after a 3 month search and a lot of rejection. The Wii trackers did not help much I found out because the shipments weren’t guaranteed to be there. I watched sites like Gizmodo for Wii shipment rumors and those were right I just showed up too late once and instead got to see everyone else walk out with a Wii but me and the 3 people in front of me. On a whim I went to Toys R Us on a Thursday on my lunch. Talked to an employee who said they got 12 in the day before. The next week I stopped by on Wednesday and I saw 3 boxes behind the glass. I got one. The employee said they had only had them in for an hour and a half and i got the 10th one. They were out of controllers so i went to target and I saw they had a Wii in stock too and some mom was just buying it. Find the ship dates and be diligent and you will be rewarded. They aren’t as hard to find as they were 4 months ago.

  9. OwenCatherwood says:

    Funny, the local Fred Meyers (Krogers for you on the East Coast) just got a supply of of them today; I would have picked one up, but I’m saving money for a cross-country move later this month.

  10. evilhapposai says:

    I work at a “Worst-Buy” and we just got some in and are hiding them in the back. They will be featured in this Sundays ad which guarentees all stores to have at least 12. So be lined up Sunday morning early…..real early, as there are some employees planning on being there a few hours early as well.

  11. adamwade says:

    It’s not tough to get a Wii if you are Internet savvy, and I’m not talking about those “wii finder” websites. A simple check of the popular Nintendo news sites each weekend shows which stores will be stocking them come Sunday (some weeks it’s Best Buy, some weeks TRU, etc.) since they all hold them for their circular in the Sunday morning paper. Get up, get to store an hour early, bingo, you get a Wii (at this point stores in my area have them in stock for several hours each shipment, you don’t even need to be there early).

    However, the problem is that for the AVERAGE person, who doesn’t hunt down Nintendo sites and just wants a Wii because they saw or tried one and thought it was “neat”, aren’t going to commit them selves or even know how to track one down aside from eBay. The very “casual” gamer crowd that Nintendo wants to attract are the very ones who grow frustrated at not being able to find them in stores, are the same ones that will eventually give up.

    The Wii is amazing. Sure, there are some issues right now (lack of keyboard support makes the Internet features near useless for anything but watching You Tube or playing Flash games, and the online gameplay situation is nonexistent almost six months since launch and not much is coming soon), but it’s a great device with some great games (Super Paper Mario is a blast) and it’s such a shame that people just can’t walk into a store and buy the dang thing. I’ve had people in their 60’s playing it and thinking it was the best thing ever, and maybe even would have picked one up post-Christmas season if they had been on a shelf. Nintendo is losing these people.

    The Wii Remotes and other accessories have finally been able to stay on store shelves, but we’re just about past the point where the availability of the Wii console and it’s rarity goes from good launch PR to bad long-term damage. It doesn’t look like it’s getting better any time soon, but next month when we hit six months post-launch, if there aren’t plenty of them on shelves it’s just going to be ridiculous; a half a year out of your life going to stores trying to buy a video game system? Even the great Nintendo can’t get away with that.

  12. superlayne says:

    “…even older Gamecube devices”

    NO ONE is buying a Gamecube…I don’t know who told you this, or didn’t tell you, but the Gamecube died with Twilight Princess. It rests in console heaven beside the PS1 and the DreamCast.

    They didn’t even sell well when they were out.

  13. guroth says:

    Nintendo might be purposely holding back on inventory until this summer when a ton of Wii titles will come out.

    Right now there aren’t many titles out and some people might get burnt out easily on the current titles and then start bashing the console because they got “easily bored” of it, when in reality they got bored of the lack of titles.

    However if you don’t own a wii and your friend does then you only have limited access to it, and even if the only title your friend has is “Wii Sports” you are not going to get burnt out on it since you have limited access (although your friend may, and may hate you for wanting to play it all the time..) This turns you (the non console owner) into a word of mouth advertising machine, and you don’t even own the product. If you owned it you might say “Ya it is fun but there aren’t many games out for it” which is a lot less selling than “OMG it is so fun I want one so bad but I can’t find one anywhere”

    Figure in that you are going to get 1 person saying “Not many games” to about 5 people (your friends who may have played on your Wii) saying “OMG fun” and Nintendo might be devising a super hype burst advertising scheme that most companies can only dream of.

  14. guroth says:

    Oh and they might also be waiting for some right-around-the-corner hardware development to complete so that they can produce the consoles for less money, thus making more profit on each console.

    From a profit point of view, what would make more sense:
    1) produce 1 million units for $200 each, make $50 on each console.
    2) wait a few months and produce 1 million units for $150 each and make $100 on each console.

    If this were the case then of course Nintendo would not say “Sorry we aren’t pumping many out, we’re waiting for the hardware to become cheaper so we can make more profit from you”

    Aside from that, if Nintendo openly apologized for the shortage then that would be confirmation that there actually is a shortage and that little bit of press release would make more public headlines than a few bloggers complaining about not having a Wii yet. Nintendo would of course rather have the masses believe that there is not a shortage.

  15. evilhapposai says:

    Nintendo rep at store said they are DEFINATLY warehousing them at the moment. For more profit or to wait for more games? No clue. But either way the flow is starting back up this week supposably.

    ‘Course this info is first hand from a Nintendo store rep in a back water lil’ suburb so may just be the rep throwing a bunch of hot air.

  16. suckonthat says:

    @evilhapposai: If two weeks from now I see a ton of Wii’s on the shelves, I am going to freak considering I just bought a marked-up one for a wedding present…

  17. benko29 says:

    Sadly, we’re not willing to punch someone’s Mom to get one.

    thankfully, you’re probably also not willing to participate in a water drinking contest for one. remember that whole clusterfuck?

  18. superbmtsub says:

    It’s ok. They can hoard up as much as they want but I hope they got them in stock in mid-June cuz thas when I will have the need for a wii(d).

  19. benko29 says:

    whoops, i forgot i copied the quote over the link.

  20. AcidReign says:

    …..@justthisguy: Actually, it was a lot worse than that! Usually, when I play video games with my kids, I’m like: “What? I’m dead again? I didn’t see it!” Big huge controller with twenty buttons, too close together, and an annoying fan blowing on my fingers, and the thing just HAS to have shorts in it…

    …..How refreshing to have a controller that you just swing around! (Or use like an old NES controller, sideways, with just two buttons and a D-pad!)

  21. kumquatmay says:

    if you’re in or around NYC, just go to the Nintendo store in Rock Center. Call first, they tend to get shipments almost every day. I ended up getting one within 6 hours of deciding to suck it up and buy one.

  22. biggeek says:

    I’m a little puzzled about why anyone should expect Nintendo to apologize for running at capacity.

    Nintendo doesn’t owe anyone an apology and he shouldn’t be surprised that he’s not getting one.

    I waited until this year to even buy a PS2 because the price point finally went down to what I thought it was worth. Plus all of the bugs have been hammered out and the games are cheap…Well, most of them.

    I’ll probably wait another five years before I even think about touching any of these new consoles. The prices for these toys are utterly insane.

  23. marike says:
  24. bartinpc says:

    @cudthecrud: This technique worked for me this past weekend as well. I spent a few weeks watching the various inventory sites for the Wii.

    I then got the Sunday paper early, found that Kmart advertised them. I showed up when they opened. They didn’t have them out for sale. I asked the electronics rep, and he went and got one out of the back office for me. He didn’t say why they didn’t have them out, but I didn’t care.

    And yes, the Wii is a lot of fun.

  25. tcabeen says:

    @evilhapposai: Definitely is still one of the most frequently misspelled words I see.

    I know I’m not the first to think this, but apparently I’m the first to thank you for the awesome info. Had it not been for that massive car repair bill last week, I may have even taken advantage of it… Since I can’t, though, that’s one more person who can. ;)

  26. MeOhMy says:

    @superlayne: I have a friend whom, when the vendor renegged on his pre-order, went out and got a GC.

    I haven’t really been keeping up with the Wii availability scene (I’ve still got unfinished games for not only GameCube but DREAMCAST). I am astounded to hear that outside the release-time holiday shopping crush they are still in short supply.

    That’s baffling.

  27. Dervish says:

    I waited in line overnight to get one at launch.

    I’m 24, btw, and I don’t regret it.

  28. mac-phisto says:

    that picture is AWESOME! luckily, one of my housemates has a wii; unfortunately, in nintendo-style, releases have been few & far between, so it’s been collecting some dust. we’ll probably break it out tonite for some good s.s.b. fun!

    well, fun until things get out of hand at which point the battle jumps from the screen into the living room. i think i still have a scar from where the wavebird hit me last time…

  29. Gloria says:

    Adamwade: Great points on the “casual” Wii player.

    I myself am laying off the Wii search until exams are over. If I had one now, my academic career would be shot.

  30. zolielo says:

    It has to do with non-market forces that relate to contractual agreements in the distribution channels…