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Wii shortages: The retail view

Don McCabe and Gerry Berkley offer another perspective on the issue of Wii hardware shortages

Having heard earlier the opinion of some analysts, spoke to two of the UK's leading retail experts to find out if the Nintendo effect is being felt in stores, and whether or not the shortage issue is a big cause for concern in the run-up to the Christmas holiday period.

Don McCabe, joint managing director of Chipsworld Ltd.

Have you noticed a difference in the kinds of people buying the Wii, compared to the other consoles?

Yes, it's very definitely a family console, one that's used by the whole family, whereas if you look at the other formats they tend to be used by one or two members within the family, although there maybe a bit of crossover between other members.

The Wii is very definitely a family machine, and it's being used as a family machine.

Do you think the other consoles' price cuts will have an effect on Wii sales?

I think that demand is so high at the moment that Nintendo doesn't need to cut the price. In fact, with hindsight, they probably rue the fact they didn't put it out at a little bit higher, and maximise the profit to a certain extent. Quite honestly, if the machine had been GBP 200 they would have still sold as many as they did.

I don't think the price point is going to have an effect on it in terms of the other formats. I think the PlayStation 3 is certainly going to pick up in terms of units sold, because of the price drop it makes it a much more viable machine.

But will it affect the Wii? I don't think so.

What about the shortages - what sort of position that put you in?

Well, from our point of view it's all about managing consumers' expectations really up to Christmas. It's nice that we're given a degree of heads-up. How true it is, and how it relates to the rest of the market remains to be seen.

Usually Nintendo are very precise. When they make statements like that they usually have a higher degree of truth than you might expect from some of the publishers or format holders.

It is nice to be able to manage consumers' expectations, but also our own expectations in terms of publishers, and what we expect to sell on the Wii, and what we can do with the machine going forward.

The ideal scenario from our point of view is for us to have a lot of stock, and nobody else to have any stock, but that's not going to happenâ¦

You don't think this is simply a move designed to maintain buzz around the product?

If you look at it from a cynical point of view, then yes, it could be construed as that, but I don't think it is with Nintendo. They know there's going to be a shortage, they know they're going to come under flak for not producing enough machines, they know they've got a runaway success on their hands

I feel that Reggie's comments are to try and possibly steer some of that flak away that they'll no doubt get in the run-up to Christmas.

Gerry Berkley, games trading manager, Woolworths.

What's been the impact of the Wii for you?

I think that the Wii has been incredibly successful. We're still at the situation that we're selling everything we can get, and there's still customer demand. You have to take it in context - looking at how tight the stock is, there does seem to be a situation where every retailer is probably experiencing customers coming in and asking "Have you got any Wii?"

Therefore it would appear from everybody that there's huge demand - or maybe they're the same customers that are going around everybodyâ¦

But I think generally it has been an amazing success, and I think really it's all going to be down to how much stock gets into the market as to how big it's going to be this Christmas. Our view is that it's going to be pretty tight all the way through - there will be stock, but I don't think there's going to be enough to satisfy demand.

I think Nintendo are doing their best to do what they can, but I suspect that the States is pulling in a lot of the manufacturing output because of the success over there as well. The UK, from what I understand, is doing well with it, but we're working closely with Nintendo and I believe they're doing all they can to get stock in.

What about the PS3 and Xbox 360 price cuts - will they affect Wii sales?

No, I don't think they'll have any effect on the Wii, I think you're talking about a different market. I think it's good news that there are price cuts on both of those formats, and I think the end result is that we'll sell more hardware all round across the three formats.

There are enough people coming in to buy a Wii that probably wouldn't be in the market to buy a 360 or PS3, just by the specification of the machine and also because it's still a high retail price. It's a considered purchase whereas I think the Wii would be bought almost like a toy, like the in-thing that everybody wants and is talking about.

So if anything I think it's widening the market, which is good news for games.

Has the success of the Wii surprised you?

It hasn't really surprised me, though I think what has surprised everybody is that it's not just the gimmicky games that are selling on it. It does seem to have come out with a different angle on gaming, and I still honestly think that people who want to play Halo, or a game like that, will not be looking for a Wii experience.

I think everybody saw the Wii initially, everybody enjoyed playing with it, and I think the concern was that it might just be a one-hit wonder, and not have the sustainability. But there seem to be enough new ideas coming out for it, and in the pipeline as well, I think there are some interesting things coming through.

Maybe people have been surprised at just how quickly it's picked up, but Nintendo has done a brilliant job of getting the message out there, as they've done on the DS as well, on how good their games are - and the public seems to be reacting very well to it.

The Nicole Kidman effect, perhaps?

Yes, and if you actually look at the difference in the marketing out there - Microsoft and Sony are not doing the same kind of marketing as Nintendo. You only have to look at the PS3 ads this week. They are very much designed for those in the know, in order to get what the advertising's about, and buy into that, and that's the way they want to position their machine.

I think Nintendo has been very direct with consumers in showing them exactly what the machine does, and they're targeting a different consumer. They're targeting a less informed consumer, and that's where they've had fantastic success on the Wii and the DS.

It works for everybody because it grows the whole market. And they're bringing in spend from different industries, that are buying into Wii rather than buying something else that might have been just another games machine.

It must be pretty helpful for a mainstream retailer like Woolworths?

Yes, it's very good. If you look at DS as a format it's been fantastic. Putting Wii aside - which is great, you can sell everything you can get - DS has been amazing all through the summer, and it's the type of games...Who'd have thought a couple of years ago that we'd have titles like Brain Training as best-selling titles, which aren't actually games in the traditional sense of what we expect?

So, yes - it's been very good, and I think there's still a lot of business to be done for the DS this Christmas as well. So having looked at what's going on in the market, with the price cuts from Sony and Microsoft, there's a good chance of all the hardware platforms having a very good Christmas.

It's been quite a while since we've had three major format holders all battling it out together.

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