Just because they're swimming in money doesn't mean they can just flick a switch and magically increase production. Any increase is going to require a lot of planning and forethought, careful analysis of the market and an researched, very educated prediction based on what Ninty know and what is likely to happen. They don't want to be stuck making 2.2 million Wii's every month then find they can only sell 1.6 million. Also any increase is going to put a dent in their finances. They do have bills to pay you know, like R + D on Wii2.

Nintendo is definitely a successful company. One of the largest in the world? I don't think so. Not even close actually. Nintendo has like 3000 employees from what I recall. They are just very efficient so they seem bigger than they are.

its a problem for nintendo but its a great problem to have. sales will decrease after new years and they may be easier to find them then but im sure nintendo isnt too upset about the supply issue

the more the shelves are empty the more publicity they get(free mind you) and as xyrax mentioned they are selling more consoles than anyone else ever has in a first year.

its a great problem to have......

First off I give Nintendo a TON of credit for starting off selling the Wii faster than any system before it. Yes they have doubled their production in their first year and that is great.

Now, I see where you are coming from and I agree with you Vizion. Nintendo did drop the ball. It amazes me to see how many people are so clueless about the manufacturing process.

1. Nintendo does not build their own factories nor do they need to. They sign contracts with third parties to lease their factories production capabilities. They do not build their own factories that is just ridiculous and would take years.

2. They don't hire security, production workers, or QA people to make or inspect quality of the product this is the third parties responsibility to make the product to Nintendo's specs. That is part of the contract.

Why do people think it is so hard for Nintendo to increase production? There is basically just a couple of things Nintendo needs and that is about 6 months for the third party manufacturer to retool some lines and get their factory ready for production and money for a contract. That's it! This is not complicated.

The hard part is to know how much to produce 6 months in advance, and Nintendo has missed in this projection. So if Nintendo wanted to be at 5 million a month they could be, but it would take 6 months from when they decided and they would be stuck at that level for about a year (length of contract).

Now I going to get crazy and say that the Wii will be supply constrained again next holiday season because Nintendo will not increase production enough. I knew back in January they would be behind demand all year, and I bet they do it again next year.

Nintendo is playing the smart card, "tease them and they'll want it even more!" I know this cuz I want one myself :(

@Reverie: I try to provide links, if i can found them.
But what we know so far, is that Nintendo shipped 5,84M units by the end of march 07, quotes Xyrax posted tell us, that 3M of them was manufactured in 07, so that basically leaves 2,84 million Wiis manufactured in 06.
Nintendos target was 2M available at launch (i try to find the quote), which makes 840k for the rest of the year, meaning about 550k monthly rate.
I think it was Iwata, who said that they planned 500k production, but after E3, they decided to ramp it up (find you the quote). That, by the way is pretty close to that 5 months, that Harrison said, assuming that the ramp up happened in december. Also someone at IBM said, before launch, that they manufacture Broadways at 500k monthly rate (and the quote).
But, i find you some links. I marked the quotes i need to find for me, so that i remember them. :)

Nobody here said Nintendo builds their own factories, and in fact you can check my posting history and see that I have explained exactly this process to people several times before.  You however are extremely optimistic in your turn around time.

A few things you are missing is that it isn't one facility that takes raw material and makes a Wii.  The reason is of course because these buildings aren't designed around Wii production.  In reality several parts come from several places and get assembled.  Setting up any one of these facilities takes about 6 months, but when you need several facilities to produce the end product things get more complicated...you might have 4 potential locations capable of producing the CPU and/or GPU but be lacking for an assembly plant, etc....  

I do agree however that estimating demand is one of the toughest parts, but it is far from the hardest thing they have to do to get production ramped up. Some times just finding a suitable facility is difficult as you don't exactly want to be sending parts around the world three times over just to get your product built.  Then there is localizing all aspects of production and producing the required parts in the required quanitities and at the right facilities can be a daunting task for any manager. 

As far as quality control goes, Nintendo sets those guidelines and expectations for the plants. You basically took my comment in a very generalized context and applied it in a far more specific context than it was intended to be used in. 

When it boils down to it though, nobody here really knows how much Nintendo did or didn't do to ramp up production.  There is just no way to know how hard it was for them to find suitable facilities, or for them to aquire the resources and parts they needed from other suppliers, or any number of other factors that we are assuming. 

The one thing we do know is that they have experienced production delays from at least one of their suppliers and I think that alone is a damn good reason to give them the benefit of the doubt.....hell a love of money is another one.

Here's the thing: Nintendo started writing out contracts for the manufacturing process probably in February, 2006. That was 9 months before the Wii's release. They actually started producing them in September / October 2006, 8 months later. They released a TON of Wiis in the first 4.5 months (something like 5.84 mil). They did not realize that this was insufficient until around February, 2007. They then realized, "Oh My God We Are Selling 1 Million Wiis Per Month And The Demand Is Not Dying."

They then needed to write up new contracts for manufacturing (through Chinese Manufacturing Plants). It is not as easy as it sounds, and it took another 8 months for them to increase production to 1.8 mil/month.

You probably weren't checking videogame boards in October 2006, but HARDLY ANYONE EXPECTED THE Wii TO DO THIS WELL! THEY WERE THE MINORITY!

Most people assumed, "Oh, PS3! That will sell like hotcakes! Why is Nintendo predicting 5 million sold in the first few months? LOL! Nintendo is hilarious! How can they sell that much when the Gamecube sold like 3 consoles."

The Wii was already a gigantic risk in Nintendo's eyes... They did not want to multiply the risk by getting production going that they would end up NOT needing.

If Nintendo could manage to wrangle the logistics of a further production increase, It would be pretty easy for them to deal with a surplus caused by that production hike.

Lots of room for a price drop.

I don't think anyone here really knows how easy or hard it is to ramp up production, so we're all just speculating. Personally I'm going to side with the OP. I can understand the shortages last year, but a full year later and they still can't meet demand? I just don't buy it that you can't ramp up production to ANY level given a full year. Which means they HAVE been too conservative despite the Wii's immediate succes a year ago, and that is a major blunder.

Producing too many Wii's was not such a big risk - the console has years to go so any surplus could eventually be used. But now they're just abandoning a part of the market to their competitors. The biggest damage from this shortage imo is that shops are always advertising the 360 and the PS3 but rarely the Wii because the few Wii's they have will sell without advertising anyway. So people not into gaming get exposed to the 360 and PS3 much more than to the Wii.

Apple never seems to have a problem meeting demand for new iPods at launch day btw, let alone a year later.