Reggie: There is no secret Wii warehouse.

[Bodhesatva]

Dryden said:

That seems to have been the popular opinion for months now, but I've never believed that. This speculation was going on all through the summer, and in one of those threads back then, I'd posted that I don't believe a company would build a tech product to not sell it. You don't warehouse something in demand now to sell later.

Warehousing proponents always said, "well you get all the software sales at Christmas time."

My take was always that you lose all the software sales you could have had from the day a Wii was built but not sold through to a customer. Nobody buying a Wii now will go back and buy the tripe that was released back then, and you've further reduced their holiday software buying budget by $250 -- the cost of the Wii. Already having the Wii in the home means they could have used that $250+ to buy 5 games, and been downloading VC titles all these months.

You lose third party developer faith by purposefully crippling your own install base when you could have been growing it. You lose money warehousing product that you could be selling.

Warehousing just makes no business sense.

On the contrary, the Christmas period is the only time where you are likely to lose substantial portions of customers. 

During the middle of the year, people are buying video game systems largely for themselves; if they cannot find one, they'll usually wait. I'm sure a small portion get impatient and buy a PS3 or 360 instead.

The problem at Christmas is that most people are no longer buying for themselves, they're buying for other people, and that changes the game. Instead of just competing against the PS3 and 360, the Wii is competing against HDTVs, GPS systems, Ipods, Silk Neckties, games for systems the people already own, and so forth.

The criterion at Christmas is to find a gift that the receiver will like, and once that is satisfied, the gift giver stops looking. If they can't find a Wii with any alacrity, choosing another option besides a Wii will happen much more frequently at this time of year than it will in June. The fact that nearly every major electronics retailer stockpiles for the holidays is rather convincing proof of this phenomenon.