Faster game flow still not up to speed

Demand won't be met until mid-2007, predict retailers

By Susanne Ault and George T. Chronis -- Video Business, 1/26/2007

JAN. 26 | Retailers predict supplies of Sony’s PlayStation 3 and Nintendo’s Wii will not meet demand until at least the middle of 2007, despite a faster flow of consoles to stores since the holidays.

Large chains are enjoying a stronger flow of PS3 and Wii systems, contend such smaller retailers as Hastings Entertainment and Virgin Megastores.

“We hear that it’s freeing up [for PS3 and Wii], and we are getting in a handful each week,” said Bart Saunt, Virgin divisional merchandise manager. “I’m hoping that we’ll soon get into three-figures on each console. But everything we get, we sell out, and we’re losing potential sales.”

In general, retailers believe the Wii has become the hotter buy. The PlayStation 3 can play back Blu-ray Disc movies, but the Wii’s appeal to non-core gaming families has broadened the product’s prospects at retail.

Saunt added, “If everything was in free supply, we would be selling more Wiis than PS3s.”

In its Jan. 21 national circular, Best Buy was able to promote a new Wii shipment for the first time since the holidays. A minimum of 20 Wii systems were guaranteed at each Best Buy outlet, but quantities sold out virtually immediately when stores opened that day at 10 a.m.

GameStop is offering $100 off a PS3 system when shoppers trade in a PlayStation 2 by Feb. 18.

In contrast, Hastings has held back including either the PS3 or Wii in 2007 advertising because of spotty shipments on both.

“It’s at random,” said Hastings director Jayme Kruse-Cordie. “So we’ve been treading very carefully, and we don’t want to create customer disappointment. It’s an inconsistent pipeline, and this is pre-, during and post-holidays.”

Overall, retailers predict that the supply of PS3s and Wiis will not significantly ramp up to meet their needs for months to come.

“We’re in tight supply for both systems,” Best Buy spokesman Brian Lucas said. “It’s not the frenzy that it was pre-holidays. But we can’t keep up with the demand on either of them. By next holiday season definitely and by the middle of next year, things should start looking a little better.”

During December, 607,000 Wii units and 492,000 PS3s were sold at retail within the U.S., according to the NPD Group. The manufacturers maintain supply is becoming increasingly robust and have both shipped 1 million each of the Wii and PS3 to stores through Dec. 31.

“Consumer demand for the PS3 continues to be exceptionally high,” said Dave Karraker, Sony senior director of corporate communications. “Recognizing this, we have been taking extreme measures to keep the retail channel filled, including airlifting units into North America on a weekly basis. Retailers are reporting that even while consumers have returned to non-holiday shopping patterns, PS3 continues to sell out soon after being placed on store shelves.”

Nintendo officials were not available for comment.

American Technology Research analyst Paul-Jon McNealy said the Wii is leaping off shelves faster than the PS3.

“Our channel checks [on Jan. 21] of 150 retail stores, from boutiques to big-box retailers, showed that 87 stores had PS3 consoles in stock, while only five had Wiis in stock,” said McNealy. “PS3 inventory quantities … are typically in the low-single digits. The comments from retailers did indicate a continued good flow of PS3 units.”

At $249, the Wii enjoys a price advantage to the PS3’s $499 and $599 models. But the Wii also is being applauded for its simple, yet innovative wireless remote control gameplay.

“Nintendo has done a fabulous job of marketing to families and capturing the entire group versus just the core gamer,” said Hasting’s Kruse-Cordie. “And at that price point, it is more viable for families too.”

« Back | Print