Wii: no slowdown in demand

November 04, 2008|By Alex Pham | Alex Pham,Los Angeles Times

Nintendo Co.'s sales are speeding along faster than a getaway car, shrugging off economic woes as if they were bugs on the windshield.

Its Wii video game console continues to be sold out in many stores. Sales of its DS hand-held console remain hot despite its being a four-year-old product, ancient by game-technology standards.

Sales of the Wii Fit exercise game, launched in May, are on track to surpass those of one of 2008's best-selling titles, Grand Theft Auto IV, by the end of the year, according to projections by Wedbush Morgan Securities.

The man at the wheel in North America is Reggie Fils-Aime. The 47-year-old is sometimes called the Regginator. It's easy to see why. As president of Nintendo of America, Fils-Aime has relentlessly promoted his company's products to mainstream consumers, expanding its marketing efforts in such unlikely places as AARP Magazine and Good Housekeeping and on daytime talk shows.

We caught up with Fils-Aime recently in Long Beach, Calif., where he was spreading Nintendo's message to 14,000 people attending the Women's Conference, an empowering forum for women.

How are women taking to these products?

Half the owners of our hand-held DS console are women. In terms of people who claim the Wii console as theirs, a third are women. That compares to about 20 percent for typical consoles. Among those who play the Wii, 50 percent are female.

What's the appeal?

With the Wii remote, anyone can play. It's made the system much more inviting and appropriate for gamers of all ages. Men love the competitive nature of games. In our research, women enjoy the social nature of games. That's why Nintendogs [a game for DS] did so well with women. There was no winning. You just had to take care of this cute dog.

Has Nintendo felt any blow-back from the economic crisis?

We have not seen any negative impact. The sales data show both the Wii and the DS up in September over [sales figures] a year ago. The Wii continues to be largely sold out at retail. We know consumers see our form of entertainment as a strong value because the entire family can play and because each game has more than 50 hours of play time.

What about the holidays?

For Nintendo, we project very strong sales. Our two platforms [Wii and DS] account for almost 70 percent of the dollar growth of the industry in the U.S. in the first nine months of this year, compared to last year.

Given that strong position, retailers are providing us with tremendous support. Retailers view the Wii and the DS as a way to draw more consumers into their stores. They are using it as a loss leader to drive traffic.

What measures has Nintendo taken to prevent a shortage of Wii consoles this holiday?

Nintendo has continually raised the production levels of the Wii hardware. We're now producing 2.4 million units a month worldwide. Last year, we made 1.6 million a month. So we've made a 33 percent increase. ... We're producing an unprecedented level of hardware to try to meet demand.

The Wii Fit has been out nearly five months, but it continues to be in short supply. Why?

I was in our New York Nintendo World Store last Tuesday, and there was a line of 40 people. Every single one of them bought a Wii Fit. We know the demand continues to be very, very strong.

At this point, only about three in 10 stores will have Wii Fit in stock. We are dramatically increasing shipments of Wii Fit. We've sold somewhere around 3 million units. The demand has been so brisk that it has been difficult to catch up.

The other challenge is that we're seeing demand from a whole new market.

Of the people who stood in line in New York, 60 percent were working women. This is a demo[graphic] that arguably has never bought a video game, and they're buying it for themselves.

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