Wii Shortage Costing Nintendo $1.3bn

[Jimmy 2004]

According to MDB Capital Group’s senior analyst James Lin, the shortage of Wii consoles could be costing Nintendo as much as $1.3bn in lost sales, saying that the volume of unsatisfied demand is “staggering” and that “Nintendo is leaving $1.3bn on the table” by failing to produce enough units. He also claimed that the company could “easily sell double what they’re selling”.

However, Reggie Fils-Aime, President of Nintendo of America, has responded to criticism that the company is artifially limiting supply by saying that "Anyone who suggests that a shortage is good for business really doesn’t understand business." Nintendo has already had to pull some Wii adverts after struggling to cope with the Christmas demand for its console, and Reg Hardware reckons that the best place for Europeans to get hold of a Wii at the moment is France, where the console sells for €210 (£150 or $300).

Source: New York Times (http://www.nytimes.com/2007/12/14/technology/14wii.html?_r=1&oref=slogin) via Reg Hardware (http://www.reghardware.co.uk/2007/12/14/wii_shortage_costs_nintendo/)

[Davidelmo]

It isn't "costing" them anything

Lost sales are not "costing" anything

Selling so many that you can't keep up certainly isn't "costing" anything

[newbielives]

I had almost shed a tear hearing this devastating news

[effmaster]

It isn't "costing" them anything

Lost sales are not "costing" anything

Selling so many that you can't keep up certainly isn't "costing" anything

Though it is curious why they havent ramped up production as much as they could have. Theres no reason why they can't shut down production lines should they overstock on Wiis

[surfsk8snow.jah]

However, Reggie Fils-Aime, President of Nintendo of America, has responded to criticism that the company is artifially limiting supply by saying that "Anyone who suggests that a shortage is good for business really doesn’t understand business."

- HAH, doesn't understand marketing ploys and strategies? Wrong. I agree completely that they really need to up their production speed if that's what they so desire. But if it so, why haven't they gone about it yet? If the factory you're hiring sux, get another on board, or get a new one. In a year's time now they should've been able to do that easily.

Now, if they are genuine in their comments, then they are being naive economically and not realizing the phenomenon that has been created by this shortage. But I don't think they're that naive.

[Davidelmo]

Opening new production lines or factories costs money, and it's probably not worth doing just for a large surge at christmas to then close them again in February. The shortage increases a long-lasting demand and ensures they will KEEP selling consoles at a high rate right through the early part of next year too.

[effmaster]

Opening new production lines or factories costs money, and it's probably not worth doing just for a large surge at christmas to then close them again in February. The shortage increases a long-lasting demand and ensures they will KEEP selling consoles at a high rate right through the early part of next year too.

Or the shortage could cause otherwise potential Wii owners who have been trying to get one for say 12 months to finally say : "to hell with it im buying a 360 since its only $30 more (or PS3 if you really wanted that instead)"