It's been 5 months and there's still a shortage.  So is it a Nintendo production problem of not shipping out enough Wii's at a speedy rate?  Or is it because in reality, Nintendo was satisfying old demand but the rate of NEW DEMAND is just increasing so fast it's out of their expectation? 

I'd say the latter.

For 5 months since launch, I didn't hear of anyone in my class wanting a Wii.  Now all of sudden, there are 2 just desperately trying to locate one though they had never even thought of getting one just few months ago.

After taking a couple of business strategy classes, we all agree Nintendo really made a difference in innovation and focused on a different market segment, therefore they are cashing in big time now.

Wii demand is simply unprecedented, several times over. This is the fastest any home console has ever been produced/sold this early by a wide margin: it seems Nintendo planned for the best-case scenario (i.e. PS2-like early demand), and even that wasn't close. Especially for it to be so strong and domineering in every region... just incredible.

I don't see any reason, moreover, for Nintendo to not increase production as fast as possible. This 'trend' doesn't show any sign of slowing, especially with big 1st party games lined up for the holidays, and Nintendo could lop $50 USD off the price no-sweat if that's what it took to move +2m systems a month.

Nintendo needs to capitalise on the demand and push out all the stops to get the production line making much more than they are.

I get the feeling that people will only wait so long to get a system they fancy and then they will look elsewhere.

I reckon that people are probably already doing that....no Wii in stock so lump for a 360 or PS3. 

there is no way that if people can't find a wii, they would go for a 360 or ps3 for that reason.  well, they might a 360 if what they really are aiming for is video game console with good graphics.  ps3 price is too high.  people buy wii cuz it's cheap and seems fun.  otherwise, they'd rather save their $250 for something else.

If you look at the history of supply constrained consoles, this doesn't seem a limiter to long term sales. The DS and PS2 were supply constrained a lot longer than 6 months.

From the handful of people I know who are looking for a Wii the mindset seems to be "I really want a Wii" not "I really want a new gaming system" which means I doubt that they will be converted to another system for lack of supply; most likely they would simply give up and not buy any system.

I believe that Nintendo expected the Wii to be successful enough to sell (roughly) 1 Million consoles per month (a very respectable total over 3 to 5 years) and are surprised at the success. Nintendo now has the problem of ramping up production to meet demand while trying not to overproduce.

Personally, the strategy I would use would be short-term (possibly extendable) contracts with manufacturing firms to increase supply; they could probably get 2 firms to produce 3 Million units each over a 6 month period. The problem with this is it takes a while to find adequate companies and negotiate terms.

A little birdy told me that PS3 manufacturing facilities may become available for cheap in the near future. Maybe Nintendo is just waiting for them.

Like your avatar, Delusional, Nintendo has already gone Super Saiyan and they are about to ascend.

(GOD I love that analogy!) 

John Lucas 

Just one correction.  That's beyond Super Saiyan.  It's Super Saiyan 2. ;)  Now....add that Nintendo analogy. :)

Well if they go Super Saiyan 3 they can't maintain that power level for long otherwise they will fizzle out and have no power left... maybe it's a good analogy :P