Wii shortages leave $1.3B on the table this holiday season
By Thomas Ricker 
posted December 14th 2007 4:24AM
posted December 14th 2007 4:24AM
If you read our comments or those from any gamer forum you're bound to stumble upon this flaming Wii, discussion nugget:WiiGuy: The Wii rocks, Nintendo can't produce enough!
H8r: They're artificially limiting supply to drive up demand
WiiGuy: No they're not
H8r: You're a fanboi
WiiGuy: No you are!
Last month, Reg himself lamented, "A shortage benefits no one, we're disappointed. This was all about how we didn't accurately estimate demand." Indeed, Reggie. According to analysts, Nintendo is leaving about $1.3 billion on the table during this holiday season alone. A figure which doesn't include additional losses from game sales. Of course, this comes as a delight to Microsoft and Sony who are there to pick up the slack.
[Via I4U]
Because it might cost more to produce more Wiis and cut into their profit margin.
A friend got tired of waiting for the Wii, so he bought a PS3 instead. Now he admits he must've ben "smoking crack" to want to buy that kiddie system.
thats a side effect of spending $300 more on a worse console. people try to justify their purchases.
he probably said that when he found out how uber great super mario galaxy is.
For everyone that's asking how they could underestimate the popularity of the Wii, just look at 1)how the GameCube performed and 2)the lack of 3rd party support for the Wii at launch (although it's slowly getting better). There were lots of people in the industry that thought the Wii interface was just a gimmick and wouldn't sell well so they didn't develop for it. Now Nintendo and game developers are scrambling to meet the high demand for consoles and good 3rd party games. You can also see this when looking at the top selling games on the Wii, the best games on the system are made by Nintendo (ie Metroid Prime 3, Legend of Zelda, and Super Mario Galaxy)and those 3rd party games that do well are usually ports (ie Resident Evil 4). Nobody saw this coming, but it will get better.
I know where the Wiis are going. They're made in China- easy to get some under-the-table deals to divert a small bit of each batch to sell locally. It doesn't quite fit, though- all the Wiis I've seen sold in China have Japanese firmware, not US firmware.
They are easy enough to get on Ebay and at very small markups.
People are just buying 10 and reselling them on Ebay. Looks like their margins are dropping though, so Wii should be in stock in about 2 weeks.
More than a year since launch, and I still can't walk into a Best Buy on a Sunday afternoon and buy one. Incredible. Nintendo is losing more money than they think, given even non gamers are interested in this product.
There IS something to be said for the fact that...it's 2007. We seems to be ABLE to make almost ANYTHING as fast as we WANT.
Now, you're just making game consoles. In theory, you should be able to make as many as you want. Just open another plant, or buy more chips, or whatever. The thing is, it may not be PROFITABLE for them to do that...but for them to say we CAN'T make them fast enough doesn't make any sense. It might cost them MORE to do so, which hurts profits...so in a way, they sort of ARE holding back stock...
Not always - you're assuming that there's an unlimited amount of manufacturing capability on every end of the spectrum; there are tons of ways that there could be a holdup such as the distributors of the components for the Wii not being able to produce as many chips/cases/etc as needed. Those companies need to sustain their business, and while opening a factory may yield a temporary boost in revenue, long term (once the Wii demand finally dies down) they would have extra factories producing nothing and just costing money. Nintendo does not manufacture all the parts for the Wii, and so there're multiple areas where the supply chain can be slowed up.
Even if there was an abundance of parts available Nintendo's not a company that'll shoot themselves in the foot; they've sustained profitability through every console, even the Gamecube (while Microsoft and Sony lost money), and in order for them to continue to do so means that they have to plan long term. Sure (if there was unlimited parts) they could open hundreds of factories (minus the time it takes to build and equip them, then have the staff needed) which would be in production for a month, but after that it would just suck up all their money to the point where they can't keep a sustained business.