The game console component supply chain may see some shaking up in the near future, with more partners expected to produce the Nintendo Wii, and Microsoft expected to adjust its supply chain amid the launch of its Xbox Elite, industry sources indicated.
Sole reliance on Foxconn Precision Components (FPC) for assembly of the Wii appears to be insufficient to meet persistent strong sales of the game console, according to the sources. In order to guarantee smooth shipments, Nintendo is now looking for one more manufacturing partner, with Asustek Computer, Compal Electronics, Inventec and Wistron aggressively striving to land the partnership, the sources noted. ODM and OEM makers including Mitac International Corporation (MIC) and Quanta Computer, however, do not appear to be candidates.
Among the mentioned players, Asustek and Wistron assemble the Sony PlayStation 3 (PS3) and Xbox 360, respectively. Asustek has accumulated revenues of NT$51.4 billion through February for its 3C goods.
According to Nintendo's latest financial statement, the game console vendor had accumulated shipments of 3.19 million units through the end of 2006. For the first two months of this year, Nintendo has already shipped 771,000 Wii consoles in North America, compared with shipments of 522,000 for the Xbox 360 and 371,000 for the PS3, according to statistics from NPD Group.
Other changes in the game console supply chain may be seen for the production of the Xbox 360. With the launch of Microsoft's Elite version, the company is preparing to reduce prices on other Xbox 360 models and has expressed its wish to reduce quotes from its three major assembling partners, namely, Celestica, Flextronics and Wistron. If any of these players seems disinclined to accept the lower quotes, there could be some shakeups in that supply chain as well.