AskDong

A reader recently wrote,

Dong, Having stood in line at 7:30 a.m last Sunday for a wii I had to wonder if I was just being tooled with via Nintendo’s marketing department or whether or not there truly is a shortage.
-JC

I did JC one better and stood in line at 6 AM in the dead of winter. I’ve had the Wii for over a year now, and there are still shortages. Nintendo’s new “game”, Wii Fit is even harder to find. Recently, I was lucky enough to obtain Wii Fit despite the shortages. I didn’t get it through any effort of my own, but via a good friend who always has his finger on the pulse of the Internet. Circuit City online had the game in stock - for about ten minutes. It seems like all things Nintendo are hard to come by. It’s really quite amazing. The Nintendo ADRs haven’t been too shabby either.

Is the Shortage Real?

I think it is. Recent sales data consistently points to incredible sales of the console. However, that is not to say there isn’t anything going on. Nintendo has not increased production of the Wii as much as demand might warrant. Nintendo is intentionally playing it conservative. Some of this is related to how the company lost it’s mojo in the late 90s. Nintendo of course denies that it’s intentionally creating a shortage. Call me naive, but I believe that Nintendo did not set about creating a shortage when the launched the Wii nearly two years ago. This is not to say that I believe that Nintendo is not contributing to the shortage today. They may not be holding back on supply, but their conservative customer expectations are leading to the shortages. It’s in Nintendo’s interest to make sure as many consoles as possible are in the hand of consumers. Ultimately, Nintendo makes more money from game licenses than it does from hardware sales.

Wii Fit Shortage
Part of the reason for the shortages in the U.S. for Wii Fit, is the weak dollar. Nintendo has chosen to shop 4 times as many products to Europe instead of the U.S. The strong Euro makes it much more profitable to sale there than it does here. It’s still a profitable product in the U.S., and if Nintendo could it would be selling more here.

While shortages may drive demand in the short run by bestowing the “IT” factor on a product, in the long run shortages on a product that requires market penetration hurts console makers. Success breed success. You can have the best game system in the world, but if no one has it, no games will be made. Nintendo is not in this position as the Wii has sold better than the XBox 360 and Play Station 3, but there’s nothing such as excess market domination. The name of the game is to crush your enemies and hear the lamentations of their fanboys.

I’ve been rather unattentive to my blog. I apologize to my readers for that. Been busy at work, and other stuff. This blog ultimately is not by number one priority, despite my desire to make it at least in my top 10 priorities.  Anyhow, to the main topic.

I’m personally perplexed at the state of the Consumerist Americana. I had been very hopeful that with the current housing downturn that Americans were finally ready to learn a lesson. I commented as much a few months ago.  I spoke too soon, and have been proven wrong.  Consumers are turning to plastic now that they’ve drained their home equity/piggy bank.  There’s no question that many Americans are suffering hard times.  Just as there’s also no question that too many Americans have also lived beyond their means.

I’m not against debt. I think debt can be a useful tool. I’ve got quite a bit of debt. Student loans and mortgages.  Properly managed debt has it’s place. The problem with debt under which I include dipping into home equity, is that it allows too many people to achieve instant gratification. If there’s a skill that modern man has forgotten, it’s the ability to delay gratification. In the old days, you had to save money if you wanted to buy something. Some people still do, but too many buy first and ask questions later.

So what does this all mean? Not sure. Though I’ll join the Greek chorus of Cassandras, and simply state the bill will come due at some point.  Hopefully soon.  I feel it’s much better to learn our lessons, endure some pain, and emerge a stronger economy of prudent consumers.  The longer we put it off, the greater the crisis.

Last night, I watched Clinton’s and Obama’s speeches after the Pennsylvania primary. There wasn’t too much new in the speeches. Watching Obama’s speech, however, I couldn’t help but notice three young men in a row sporting very prominently Abercrombie and Fitch T-shirts. At first, I didn’t think too much of it.

As the crowd cheered and banners were raised, I became suspicious. Thoese three men were less than enthusiastic. They lifted their Obama signs half heartedly, and clapped without vigor. I started thinking about the recent incident when Comcast paid attendees to take up the good seats at a FCC hearing. That was bad, but this if Abercrombie plants are in my opinion worse. Here’s a link to a video from CNN, and make your own judgment.  I just wrote the other day of the blurring of entertainment and advertising.  What I saw last night was the blurring of politics, public discourse, and advertising. If I were Obama, I would be immensley upset that my stage had been co-opted for product advertising.

If it were any other clothing company, I probably would not be as suspicious. However, Abercrombie and Fitch has a history or controversy, ranging from nudity to racism. I wouldn’t be suprised if that the three Abercrombie men were intended to stir controversy and free advertising for which I too am guilty of as I write about it.

I think there is a place for advertising, and consumerism even. There’s nothing inherently wrong with companies wanting to spread knowledge of their products. In the same light there’s nothing wrong with people wanting to buy those products. However, I increasingly feel that we as a society have crossed an invisible line in which consumerism has become an ends on itself.  Andy Warhol would be proud.

Watching movies such as Cast Away or the latest Bond flick, the product placements are obvious enough. Cast Away was a movie length advertisement for FedEx.

Now NBC is ready to take it to the next level, and embed the marketing message as central premises of the show. Currently product placements is supposed to be just that, the use of the product in a movie or TV show.  The visibility of product placement has become less and less subtle, and it’s unclear to me that movies and TV shows aren’t really just marketing products.  After watching the Italian Job, I sure wanted to get a BMW mini.

While I have no problem with the actual use of real products on TV or in the movies, much of me is nostalgic for the days when Alex Keaton drank from a soda can that was neither Coke or Pepsi.  Today, Alex would be drinking from the highest bidder.  As the line between entertainment and advertising becomes furthered blurred, it becomes more difficult to distinguish between what we actually want and what we are told to want.