Nintendo Officially Disapproves Of "Bundling"

Bundling may be a popular tactic retailers employ to force customers to spend more money, but Nintendo of America’s celeb-President Reggie Fils-Aime has come out against it, finally: “Retailers have already been given feedback that we are not big fans of that,” he told Reuters this week. Is the pre-purchase deal with GameStop one way Nintendo is preventing that from happening this December? If anyone actually buys one of those empty DVD cases, let us know if they try to upsell you to a bundle.

We think it masks some of the price advantage we have versus our competition and, frankly, the consumer should decide what they want,” Fils-Aime said.

Asked if Nintendo had threatened such retailers with fewer Wii shipments, Fils-Aime said only that the company carried a lot of weight as maker of one of the most highly sought items this holiday season.

“We don’t have to remind retailers of the strength we have right now. We are simply making an observation and that reinforces our point quite nicely with retailers,” Fils-Aime said.

Fils-Aime also said that Nintendo is having trouble getting its supply and demand curves in sync. Maybe they should release a networked DS game that crowdsources Nintendo’s supply chain for them—we couldn’t do any worse than Nintendo has.

“Nintendo says Wii shortages hurt planning” [Reuters]

RELATED
“Reggie (Softly) Threatens Bundling Wii Retailers” [Kotaku]

Comments

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  1. esqdork says:

    Funny, the retailer Nintendo is pairing up with to offer rainchecks is the first entity I think of when I think “bundling.”

  2. davebg5 says:

    Need a Wii in NYC?

    The Toys ‘R Us in Time’s Square had hundreds of them for sale this morning.

  3. jerros says:

    What use is a game console with out a game to go with it? When the NES came out so many years ago it had both Super Mario Bros and Duck Hunt. These days your lucky to get a demo disc.

    Honestly it’s like buying a toy that needs batteries but never buying the batteries. So unless Nintendo is willing to offer “1 free game” when you plunk down cash for their console (unlikely), Retailers are just going to try and do what nets them the most profit and that means selling you a console with a bunch of games you probably don’t need and at least 1 you don’t want.

  4. Caprica Six says:

    i got my Wii at the Nintendo Store by NBC studios in NYC. They had *plenty* in stock….but that was during the summer ;)

  5. madanthony says:

    @ Jerros

    The Wii does come with Wii Sports, which includes five very good games. So it’s not like it doesn’t come with anything.

    And it’s hard to see how having to buy several games you don’t want instead of what you want is an advantage.

  6. johnva says:

    @jerros: As mentioned above, the Wii does come with a free game, Wii Sports.

    And it doesn’t seem like most retailers are doing this. I’ve seen plenty of places advertising the Wii unbundled.

  7. realjen01 says:

    and sometimes the bundle is a bunch of crap games that nobody wants

  8. Athenor says:

    The latest NPD numbers said Nintendo sold 980,000 Wii’s in November, give or take some.

    And you guys are blaming Nintendo for having their supply curve out of whack?

  9. humbleish says:

    @jerros:
    It’s not just that a bundle a game with the system, it’s that they bundle a game you don’t want with a bunch of junk you don’t want and charge you more.

    If retailers were selling the system with an extra controller and saying “you have to buy at least one game with the system,” it wouldn’t leave such a bitter taste in our mouths. The problem is they bundle in the garbage games no one is buying and some terrible 3rd party accessories, and force the entry price of the Wii to 2x or more than it should be. They can’t raise the price of the system itself since almost everyone has price guarantees now, so what they do is sell you a bunch of junk they can’t sell individually, and hold your Wii hostage until you buy the crap you don’t want.

  10. Myron says:

    Walmart seems to be one of the worst bundlers. But Nintendo needs Walmart more than Walmart needs Nintendo. So tough cookies.

    Hey Walmart, way to go on taking advantage of desperate parents trying to get their kids a game. Great family values. What’s next, stealing candy from a baby?

  11. PinkBox says:

    I’m glad I was able to find the Wii unbundled. (and I got it the day they first came out, ha!) ;)

    I can’t stand the idea of being forced to buy games I do NOT want just to have a chance at getting the console.

  12. SaraAB87 says:

    Usually you can ask to buy the system alone even when its only offered as a bundle. Is it even legal to “force” bundles on the customers? I know Toys R Us will let you buy the system alone without the bundle if you just ask them.

    I think the bundles are set up for convienence sake. Most parents buying a Wii for their kids don’t have a clue what games to buy, so they will spend hours pondering it in the store, wasting employees time when they could be helping other customers. So they just bundle the system with some games so that parents have an instant, ready to give gift this christmas. These people don’t know a good game from a bad game so they just take whats in the bundle.

    It seems that things like game systems sell better in a starter set or bundle which includes everything you need to get started playing the system right away, instead of having to run out to buy something you forgot, like a memory card or extra controller because you didn’t know you would need it.

    Look at the Sony PSP daxter bundle and how well its selling, its a pre-made bundle pack from sony yet it includes everything needed to start playing the system right away, and its the most popular selling PSP system currently.

  13. mattshu says:

    Our local Game Crazy (the only place in town that ever has Wiis in stock) just started only offering bundled Wiis last week. That sucks, but fortunately I already got mine (and a few extras for relatives and ebay-which paid for my Wii and accessories).

  14. quail says:

    I’m not against bundles when it’s stuff you’re likely to get anyway. A Wii bundle with extra controller, the nunchucks, a charger, and a memory card can actually be worth it. Many times you get everything in the bundle for ten to thirty bucks cheaper than buying the items separately. But do your comparison shopping. Sometimes the bundle is no cheaper than buying it all separate. In that case, it’s a big rip off.

  15. @Athenor: We’re not—the president of Nintendo of America, Reggie Fils-Aime, is.

    “The level of demand we are facing complicates all of our future business planning,” Reggie Fils-Aime, president of Nintendo of America, told Reuters in an interview. “All of that becomes a much tougher exercise until we have supply and demand curves that intersect.

  16. BloggyMcBlogBlog says:

    The funniest bundles are the ones packaged with third party Wii-mote covers. Um, hello, Nintendo now gives those away free with the system. Just some shady retailers trying to get rid of stock nobody in their right mind would need or want.

  17. veraikon says:

    A Sears electronics department staffer told me that Nintendo is releasing 1 million Wiis “after Christmas”. Whether this means the day after, the week after or the month after, he didn’t know. If it’s true, then I’ll just pick one up then.

  18. Anonymously says:

    Ars technica is channeling the Consumerist spirit on this one.

  19. Shadowfire says:

    @esqdork: Gamestop’s B&M stores have never forced bundles. At the very least, it is against company policy, and if a store tried to force you to buy a bundle, a quick call to the corporate office would clear that up for you.

    In the end, I really don’t mind bundling, and Nintendo should shut up about it. When console manufacturers allow retailers a small profit on the systems, then they can complain.

  20. mac-phisto says:

    @Myron: i don’t see how nintendo needs wal-mart at all. they are selling their products at hundreds of other physical & online retailers. just b/c wal-mart is the largest, doesn’t mean nintendo can’t do without. if wal-mart made a demand out of line with nintendo’s deployment strategy, you wouldn’t see nintendo products on the shelves there anymore.

    @SaraAB87 & quail: from what i’ve seen helping others shop for a wii, you CANNOT buy it online from a major retailer without bundling. the bundles don’t really save you any money, but they give stores the profit off the console, 2nd controller & 3 or 4 games of questionable worth. for that, the customer is guaranteed a unit. they’re cashing in on convenience. & i don’t see it to be any more fair than simply charging $500 for a wii. if you’re getting $250 of games you’ll never play, what’s the difference?

  21. Propaniac says:

    I spent several weeks back around March haunting websites like WiiTracker, and it seemed like there were actually Wiis listed for sale from at least one website more often than not, but they’d always be in bundles costing at least $400. They’d just sit there waiting to be bought, while any site that had just the console in stock would sell out within minutes. It was pretty obnoxious. (I got lucky and nabbed my console when I stumbled on them for sale at the Toys R Us website.)

  22. guroth says:

    They are not talking about real bundling, like the game actually being inside the wii box

    They are talking about retalers doing aftermarket bundling.

    If a store has 5 Wii’s, they know they are going to sell FAST, so iif instead of just selling 5 Wii’s they sell 5 “Turbo Wii Packs” which includes an extra remote/nunchuck, some cheap plastic stand crap, maybe some of those silicon rubber grip things, and a few games.

    So now instead of having a guaranteed sale of 5 wii’s they have guaranteed sales of 5 wii’s, 20 games, 5 extra controllers etc etc

    meanwhile when Nintendo wholesaled the Wii to them they did it with the intention of the store selling the Wii as is, not forcing the consumer to buy extra stuff just to get the Wii.

  23. Techguy1138 says:

    The console price to far to low for the demand.

    Nintendo spent something on the order of $200 million promoting the Wii last year.

    The stores should be able to raise prices on the wii until they can just barely sell out before the next shipment.

    The artificial price Nintendo set is a bit like Zimbabwes price fixing.

  24. UpsetPanda says:

    The worst case of bundling I’ve seen is from GameStop – it costs an arm and a leg, and you don’t have any choice with the games that “come with” it. But, there’s also fine print that tells you if stock for the game is unavailable, they can substitute. I’m wondering how many people who purchased the bundle got a game they didn’t want.

    The Wal-Mart bundle was actually kind of okay, because it gave you options. It listed maybe 15 titles and you could pick the 5 or 6 you wanted. The problem was, none of them were very good, and some of them were being sold individually for much less than the $50 original MSRP.

  25. rbb says:

    I’ve been watching wiitracker.com for the last few weeks. In the last two weeks, only Sears has put up the basic console for sale ($250). The rest have been going for bundles. And as Christmas approaches, the bundles have been getting more expensive. Walmart’s is running at 677+ and Toys r Us is now pushing a $700 bundle.

    Whoops – hold on. Just checked wiitracker. Amazon had the console for sale this morning for $250. They lasted 7 minutes. TrU has been hawking $700 bundles all morning – those too are selling out in 7-8 minutes. Strange thing is they have them in stock right now for the last 3 hours…

  26. Athenor says:

    @Chris Walters:

    Yes, but your story has the following line:

    “Maybe they should release a networked DS game that crowdsources Nintendo’s supply chain for them-we couldn’t do any worse than Nintendo has.”

    This has a very negative connotation to it, implying that Nintendo has done everything wrong with regards to the Wii’s distribution chain. While it may just be a zinger ending to your article, the tone has to be taken into account.

  27. theblackdog says:

    Costco had the best Wii bundle that I saw. The bundle was the Wii, an extra controller and nunchuk, and Big Brain Academy. I gladly welcome bundles, if they come with good games.

    Isn’t it also ironic that for Black Friday Nintendo was selling special edition DS Lites that came with Zelda: Phantom Hourglass, or Nintendogs?

  28. UpsetPanda says:

    @rbb: But does Sears actually have any? Or are they just collecting orders only to tell people later, “oops, sorry. Our bad.”

  29. deadlizard says:

    Nintendo pulled off a nice trick there. Making the Wii scarce, not
    one, but two holidays in a row. The Wii hunting only makes it more
    desirable. Expect Nintendo or some other company (Apple?) to do the
    same trick again.

  30. mgyqmb says:

    I bought a bundle from walmart. I’m completely okay with it, however, since they gave me a CHOICE of games (Mario Galaxy, Zelda, Metroid, all the good ones), and two extra controllers, as well as component cables. So worth it. The wii rules.

    Most of these bundles tack on lower selling games just because. Walmarts worked out exceptionally well for me.

  31. SaraAB87 says:

    I completely forgot about the online retailers forcing bundles, but most of the time if its a retailer-made bundle at the store, you should be able to ask to buy the system alone and they will oblige.

    Yeah, online bundles are evil, these need to be eliminated.

    It would be very stupid if Nintendo stopped selling Wii’s at Walmart. I once heard that 90-95% of the video games that American’s buy come from Walmart. If they stopped selling systems there, they would lose a HUGE amount of money.

  32. chiieddy says:

    Nintendo is the only manufacturer of a current gaming system making a profit at the $250 set price. PS3 and XBox are being sold at a LOSS which is the standard business model. The manufacturers attempt to make money on games after selling the consoles. Nintendo is making profit on the console PLUS selling additional games at the same price point as its competitors.

    Considering how popular the systems are, seems like a smart business move to me.

    The problem is manufacturing capacity. Nintendo doesn’t just supply Wii to the US. Actually, it just released the product in China recently. Demand is high and it can’t keep up with the supply. They’re manufacturing enough to keep their profits high and don’t need to raise the price to lower demand. Why bother?

    By the way, when you buy a Wii, you not only get the very awesome Wii Sports, but you get online ability to download hundreds of classic Nintendo games (and some Genesis games too) such as the original Super Mario at a relatively low cost.

  33. Jurph says:

    This is not just unethical – under the Monopoly and Restrictive Trade Practices act of 1969, forced bundling is illegal. The agreement specifically forbids

    [quote]
    33(b) – any agreement requiring a purchaser of goods, as a condition of such purchase, to purchase some other goods;
    [/quote]

    I suspect that invoking the law in the presence of a sales associate on the floor might get him to reconsider his sales approach. If faced with an associate demanding that you buy a bundle, just say “Do you know that you’ve just exposed $CORP_NAME to a lawsuit for violating section 33b of the Restrictive Trade Practices Act? Maybe we should have a chat with your manager and see if he knows that it’s illegal.”

  34. RvLeshrac says:

    @Jurph:

    You don’t typically *HAVE* to buy a bundle. The bundles tend to be offered at a discount, though (mileage may vary, you may not want the games included, etc etc).

    You can always take the extra unopened titles to Wal-Mart and return them, of course, especially during the holidays! That should net you a small ‘profit’…

    Preorders, of course, like the preorder-bundles at Gamestop, don’t count under the law. They can force you to buy a bundle if you wish to preorder because, hey, you don’t have to preorder. You can pick up an unbundled console at the store… if they have them… which they won’t, because it is a new console on launch day.

    They aren’t making much extra on game bundles, anyway. There’s very little profit in individual game sales, the huge profits that Gamestop makes are due to raw sales volume.

  35. mystang101 says:

    What people do not realize is that retailers need the add-on items to remain in business. Retailers make just a few dollars profit on a $250 game system, so they rely on these bundles. If Nintendo is so against the bundles, then they should lower their own profits, and give more to the retailer. Also, if systems are not sold in bundles, every one of them will end up on Ebay. Would you rather pay $350 at a retailer for a system, extra controller and one game, or $500 for just the system on Ebay? Also, if Nintendo is laying blame on retailers, why do they only include one controller in the first place? If you are to ever play a 2 player game, NINTENDO is the one forcing you to pay more money buy forcing you to purchase the “extra” controller. Either way, spend the money today and get the game and the controller, or come back next week and get it after Johnny wants to play a game with his friend. Nintendo puts the screws to you, not the retailers. By the way, this is the same with all game platforms, not just Nintendo… If you are a gamer, you will pay the price!

  36. CheeseSteaker says:

    Toys R Us is putting bundled packages on sale (online), even though they are unable to fulfill those orders, then offering more expensive bundles without fulfilling those orders, too. It is obvious that they are building a backlog of orders to clear the low-demand games from their inventory and getting the additional profit from selling the games that they would never be able to sell.

    I called customer service and they explained to me that they can’t keep up with the ordering and hence they always end up overselling. That still doesn’t explain how they can sell more packages later when they can’t deliver on the previous orders. The operator acknowledged that there was an obvious problem with this… but couldn’t do anything for the customer.

    I cancelled my order and allowed myself to be taken advantage of by a reseller charging $350 for a basic console. There will be a Wii under my tree on Xmas morning. Basically I funded that purchase from the profits of scalping Hannah Montana tix! Now that’s this season’s irony.

  37. superdewa says:

    Why is it still so difficult to get a Wii and it’s halfway through March? And why am I not reading news stories about this or hearing anything about when this might end or about the creeps who buy up the few that are available and sell them on ebay?