Why Do Wii Shortages Keep Showing Up?

By Max Brenn
15:55, October 2nd 2007
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Why Do Wii Shortages Keep Showing Up?

Despite the fact that it’s been almost a year since Wii’ inception on the market, demand for the revolutionary console is still very high, determining shortages for this Christmas too.

I really don’t know whether this is real or some kind of cunning commercial strategy, but this shortage Nintendo is continuously facing with the Wii is becoming annoying. All I keep hearing is that Nintendo is so successful with both its hardware and software products, outpacing its home ground rival Sony in terms of sales and market value (Nintendo is now valued at $65.79 billion, becoming the second most important Japanese company, after Toyota), but a negative constant among this plethora of good news keeps showing up like a bad omen: the Wii shortages.

During an interview with San Jose Mercury News Nintendo of America President Reggie Fils-Aime dropped the atomic bomb, after boasting with the stellar sales the company has to “endure” everywhere it goes:

“We have been sold out worldwide since we launched,” said Fils-Aime to the Mercury News. Every time we put more into the marketplace, we sell more, which says that we are not even close to understanding where the threshold is between supply and demand.

The issue is not a lack of production. The issue is we went in with a curve that was aggressive, but the demand has been substantially more than that. And the ability to ramp up production and to sustain it is not a switch that you flick on. We’re working very hard to make sure that consumers are satisfied this holiday, but I can’t guarantee that we’re going to meet demand. As a matter of fact, I can tell you on the record we won’t.”

Reggie’s opinion about the huge Halo 3… halo is that the game will indeed beat every record still standing (it has already beaten some of them), but considering Bungie’s FPS chef-d’oeuvre a “system seller” is tricky, because there are other games in the same genre that can compete very well with Masterchief’s final fight:

“Will they sell a lot of software? Certainly. Will it sell hardware? I think it’s an open question. Why? Because I think that the “Halo 3″ consumer already has the hardware, because they’re playing “Bioshock” and “Crackdown” and a variety of games that are, in the end, quite similar: first-person shooter experience, multiplayer capable online. Tell me what’s new?”

Essentially, we understand that Reggie is totally unimpressed with Halo 3. What we don’t understand is why a company for which world’s most important financial consultancy firms strongly recommend investments (and for a long time from now on, considering its positive perspectives), which has upgraded its profitability forecasts at least two times this year (following, of course, strong sales for the Wii and the DS) and which has an increasingly high audience just can’t upgrade the production line also.

At the end of January this year, Nintendo boasted with having sold more than 4 million consoles by then end of 2006 and that in order to keep up with demand the company would increase monthly Wii production to more than 1 million units. At such a pace, by the end of this year, over 16 million consoles will be produced, considering that between January and March 2007 (the end of the previous fiscal year) more than 3 million Wiis found their owners. To give scale to such a figure, the Nintendo Gamecube sold 22 million units over the course of six years.

So, why Reggie, why, with all that cash in your pockets from the DS, the Wii, Mario, Luigi, Metroid, Donkey Kong, Pokemon or Zelda, why can’t you just upgrade that damn production line?...



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