Topic: Dear Reggie: Re: Bundles

[UncleBob]

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Originally posted by: ShyGuy
so can Nintendo go elsewhere if they don't want to bundle.

Yes, they can... But this is where we touch on the (S)NES-era arrogance.  Nintendo would short-ship/refuse orders from retailers that would sell the products over MSRP (which I believe there was a lawsuit over) or retailers who would sell unlicensed accessories/games or retailers who didn't give them enough shelf space (even empty shelf space dedicated to product that Nintendo couldn't keep the stores stocked with) or retailers who would just look at them funny.

Retailers need to consider the power that Nintendo has, yes.  But Nintendo needs to consider the power that retailers have as well.

Also, an interesting thing to note - as I mentioned earlier, Wii allocation is based on a retail's orders of various 1st party Wii/DS games and accessories.  How many retail stores are overloaded with Wii Play and Super Mario Galaxy that they didn't bother to order Zack and Wiki (or insert any other 3rd party title that you've had trouble finding at retail here)?  

[ShyGuy]

Nintendo will get their come-uppance two generations from now.

[Mario]

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Yes, they can... But this is where we touch on the (S)NES-era arrogance. Nintendo would short-ship/refuse orders from retailers that would sell the products over MSRP (which I believe there was a lawsuit over) or retailers who would sell unlicensed accessories/games or retailers who didn't give them enough shelf space (even empty shelf space dedicated to product that Nintendo couldn't keep the stores stocked with) or retailers who would just look at them funny.

Nintendo Australia did that recently with one fairly big store here (Harvey Norman) and it worked out very well for them with HN crawling back to Nintendo on their knees.

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Also, an interesting thing to note - as I mentioned earlier, Wii allocation is based on a retail's orders of various 1st party Wii/DS games and accessories. How many retail stores are overloaded with Wii Play and Super Mario Galaxy that they didn't bother to order Zack and Wiki (or insert any other 3rd party title that you've had trouble finding at retail here)?

That is very interesting, but half the blame is still on the store since they should have some kind of clue what games they should get and proper organisation.

[Dirk Temporo]

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Originally posted by: UncleBob
How's their PS2 and PSP space though?

The PSP section is about the size of the Wii section, and still smaller than the Gamecube section. And the PS2 section NEEDS to be huge because of how many games there are.

[BranDonk Kong]

I believe the retailers actually do pretty well on Wii's hardware sales. The wholesale is something like $235 IIRC, so they make $15 or so on each one. That may seem like chump change, but when you sell 50 of them in 5 minutes, that's a pretty quick $750. Also, when the PS3 launched, according to my game-store-owner-buddy, retailers had to pay about $297-$299 for each system, making $0-$3 off each system.

[ShyGuy]

6% is lousy in the scheme of all things retail, but such is the nature of electronics.

[UncleBob]

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Originally posted by: Mario
That is very interesting, but half the blame is still on the store since they should have some kind of clue what games they should get and proper organisation.

The retailer does know what games to get.  In order to get a larger allocation of Wiis, the retailer knows they have to get 1st party games.  Nintendo doesn't care about the sales of Zack and Wiki - they care about how many copies of Super Mario Galaxy they can move.  So, if a store is looking at ordering (I'm making these numbers up here) 12 copies of Super Mario Galaxy and getting three more Wiis in the next shipment, or ordering 12 copies of Zack and Wiki and getting no more Wiis in the next shipment, which are they going to do?

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Originally posted by: Dirk Temporo

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Originally posted by: UncleBob
How's their PS2 and PSP space though?

The PSP section is about the size of the Wii section, and still smaller than the Gamecube section. And the PS2 section NEEDS to be huge because of how many games there are.

What's the size of the DS vs. PSP section?

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I believe the retailers actually do pretty well on Wii's hardware sales. The wholesale is something like $235 IIRC, so they make $15 or so on each one. That may seem like chump change, but when you sell 50 of them in 5 minutes, that's a pretty quick $750. Also, when the PS3 launched, according to my game-store-owner-buddy, retailers had to pay about $297-$299 for each system, making $0-$3 off each system.

Wait... $299 for a PS3 that sold for $399 or $499?  I think your numbers are a little off.

Anywhoo, the markup on systems is crap.  Retailers make their money selling games and accessories.  This is why I completely understand online retailers bundling stuff with the system.  Most people don't buy most of their games/accessories online*.  So the online retailer doesn't get the extra markup form the add ons that they would normally in a store - either at the time of purchase or during the life of the system.  Thus, the bundle assures them that they'll get something for selling the system.  I would assume online retailers are held to a similar standard that they too order more games/accessories in order to get more Wiis.

*Yes, I know a lot of us do buy online, but I'd bet that the majority of the time we buy stuff online is when we get a good deal - i.e.: the retailer isn't making much on the markup.  If it's a new release, most of us will just go out and buy it and rarely do we impulse purchase regular priced games online...

[Ceric]

I wonder if Nintendo would object to doing a 3:1 type equivalent where ever 3 non-Nintendo game in stock equalled one Nintendo game. (As in 3 Zak and Wiki = 1 Mario Galaxy.)  The number can be whatever amount it takes of selling a third party game to make Nintendo enough to be like selling a first party game.  I don't know what that is off the top of my head.  That way a more balance stocking arrangement wouldn't hurt a retailer as much.  Do the same for accesssories.

[UncleBob]

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Originally posted by: Ceric
I wonder if Nintendo would object to doing a 3:1 type equivalent where ever 3 non-Nintendo game in stock equalled one Nintendo game. (As in 3 Zak and Wiki = 1 Mario Galaxy.)  The number can be whatever amount it takes of selling a third party game to make Nintendo enough to be like selling a first party game.  I don't know what that is off the top of my head.  That way a more balance stocking arrangement wouldn't hurt a retailer as much.  Do the same for accesssories.

So then a retailer has to look at it this way - buy 36 copies of Zack and Wiki and get three extra Wiis, or buy 12 copies of Super Mario Galaxy and get three extra Wiis.  Oh, and the Super Mario Galaxy is virtually a guaranteed sale at regular price (because it's a Nintendo title!)  Zack and Wiki will probably not sell out at retail price and be marked down once or twice. (again, I made up all the numbers here off the top of my head... I don't know exactly what the ratio of software/accessories to Wiis is. (Wiis is?  Say that five times fast.))

[Kairon]

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Originally posted by: UncleBob
Also, an interesting thing to note - as I mentioned earlier, Wii allocation is based on a retail's orders of various 1st party Wii/DS games and accessories.  How many retail stores are overloaded with Wii Play and Super Mario Galaxy that they didn't bother to order Zack and Wiki (or insert any other 3rd party title that you've had trouble finding at retail here)?

This is simply counter-productive. But I guess I can see why this is handled this way.

Nintendo needs some way to decide where to send things, and this way is better than guessing out of the blue how many to send to each store. They've already got an internal tracking system for their own software, so I guess using that makes perfect sense. Though maybe this internal tracking system is incapable of tracking third party sales?

Maybe Nintendo should dispense with this and go on a pure unit basis for any games sold for the system, first or third party. (I wonder how they'd track this though) Or maybe they could go on a revenue sold model.

Either way, they should find some way to include third party games in the equation.

[ShyGuy]

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Nintendo doesn't care about the sales of Zack and Wiki

That's just speculation. Nintendo has helped out third parties this generation.

[GoldenPhoenix]

I still wonder if Zack and Wiki sales are that bad. The game probably didn't have a huge budget and the marketing was non-existent. At 130k sold I think there is a fair chance Capcom made their money back or even made a profit!

[NWR_insanolord]

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Originally posted by: ShyGuy

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Nintendo doesn't care about the sales of Zack and Wiki

That's just speculation. Nintendo has helped out third parties this generation.

They have, and I can't figure out why. It's not a very good business decision; Nintendo makes more money with games they publish themselves, a first-party title, Wii Sports, is what's selling the console, and Nintendo proved with the latter halves of the N64 and Cube's lives that they can sustain a console all by themselves and still make a lot more profit than their competitors. I'm not saying their newfound appreciation of the third-parties is bad, just that it's not something that benefits them a whole lot.

[Kairon]

Nintendo needs to help third parties because what Nintendo is doing isn't just about the money, it's about videogames, the perception of videogames, and the way that the industry approaches videogames. Nintendo is selling a philosophy on gaming, as much as they are selling systems. If they only end up convincing themselves that videogames should be accessible to everyone, that high-def isn't important , that for fun, that people other than 19-29 year old males play games, then they will hqave accomplished nothing.

[GoldenPhoenix]

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Originally posted by: Kairon
Nintendo needs to help third parties because what Nintendo is doing isn't just about the money, it's about videogames, the perception of videogames, and the way that the industry approaches videogames. Nintendo is selling a philosophy on gaming, as much as they are selling systems. If they only end up convincing themselves that videogames should be accessible to everyone, that high-def isn't important , that for fun, that people other than 19-29 year old males play games, then they will hqave accomplished nothing.

You know, 3rd parties could do alot to help themselves if they actually released a few QUALITY 3rd party games. At the moment there is so much garbage that the few good games get buried. 3rd parties have no one to blame but themselves.

[ShyGuy]

Nintendo is obviously the arrogant bad guy here too. http://arstechnica.com/news.ars/post/20071220-exclusive-retail-chain-scalping-wii-allotment-on-ebay.html

[UncleBob]

Hey, it's not the bundle that everyone is complaining about...

[UncleBob]

http://slackers.com/index.html

[ShyGuy]

Nintendo's arrogance is obviously destroying mom and pop small business. I AM GOING TO BURN MY WII IN EFFIGY.

[UncleBob]

Oh, look - more bundles with exclusive hardware:
http://blackfriday.gottadeal.com/black-friday-583-SpecialEditionIceBlueorMarioRedNintendoDS.html
Gah - how old are these two titles?
It would have been better to include Brain Age 1&2 in the Brain Age Bundle though...

In honor of these new bundles, I'm going to bundle our next few Wii shipments with our remaining stock of GameCube titles.