Sunday, November 19, 2006

Wii Launch in Austin

My plan this morning was to call a Sears store right next to my house. Stealth electronics store, hasn't been open that long, doesn't have many shoppers yet. Perfect launch scenario.

I assumed the store opened up at 9 a.m. on Sundays, but that was wrong--it opens at 8 a.m. Oops.

Still, though, when I called at 8:30 a.m., I was still feeling pretty confident.

"This is Sear's Electronics, home of the sold-out Nintendo Wii," the clerk said.


That's when I realized that I had been right about the Wii in the strategic sense (it's going to be freaking huge, far bigger than any of the industry analysts realize) and entirely wrong in the tactical sense ( I wasn't going to get one).

In Austin, at least, these stores all received shipments of the new Nintendo Wii:
--Best Buy
--Circuit City

To the best of my knowledge, every single one of these locations are completely sold out. As far as I could determine, there were lines for every single available unit before these stores even opened.

Fry's had this obscene bundle where you had to buy five games (that you didn't get to pick) that were bundled with the unit. No matter. Sold out.

We're not talking PS3 launch quantities here, either. I'm guessing Nintendo launched with 600k units, maybe more. And if Austin is any indication, good luck finding one.

So ignore what Nintendo is saying about how many units they're shipping before Christmas. It doesn't matter. They're going to sell every unit they can make, and as soon as they're put out on store floors, they'll be gone. By next weekend, when people have actually gotten a chance to try the Wii, it's going to be the single hottest Christmas toy out there.

I actually caught a huge break after getting totally screwed all morning. When I got home (steam rising off the top of my head), I sat down and started looking for Wii pages at major online retailers. I was going to add them to WebMon so that I'd be immediately notified when the Wii was in stock anywhere.

The second page I was going to add was the Amazon page, but it said "in stock."

You've got to be freaking kidding me. That was the fastest one-click order I ever placed.

Less than a minute later, that same page said "only 2 more in stock. Order soon." Fifteen seconds later, it said "This item is currently not available."

I must have miraculously hit a five minute window (or less) completely by accident. I'd rather be lucky than good, though, because, well, I'm not good.

So what does this all mean? I have a few ideas.

The PS3? Just watch. It was hot for a grand total of two days. Now the Wii has 4X the installed base AND Nintendo will ship 4X (or more) as many units to resupply for the rest of the year.

Here's why that's such a disaster for Sony, and even if my math is slightly off (apologies in advance), you'll understand. Here are the data points:
--it's been estimated that, at a minimum, a PS3 game costs twice as much to develop as a Wii game.
--the Wii installed base, at a minimum, is going to be 4X the PS3's. The Wii costs half as much as Sony's low-end PS3 and Nintendo's shipping far more units (and will be for the foreseeable future).
--PS3 games will cost $10 more than Wii games.

So, indendent of game prices, it costs EIGHT TIMES as per, per customer, to develop a PS3 game. And that 20% delta in game prices just isn't going to bridge that gap.

Plus, and this is exactly what I expected (and wrote about several times), almost none of the media coverage of the PS3 is focused on fun--"it's powerful, it's very expensive, the lines were long, and it plays Blu-Ray movies."

The Wii coverage, uniformly, has been "it's fun, fun fun!" And while some of the reviews from gamign sites have been not been uniformly positive, all kinds of people who don't usually play games are being given Wiis to review, and they're all in love.

Great, great marketing on Nintendo's part.

Sony and no analyst on Sony's bandwagon will admit this yet, but they're already in deep, deep trouble.

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