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Vizion on 14 December 2007
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Supply shortages have been part of the Wii for most of its life in the US. It seems it may be costing the company more than many may have imagined.  
 

December 14, 2007 - It's no secret that Nintendo can't keep Wii consoles on the shelves in America, with many people trekking from store to store in hopes of finding one of the Big N's elusive white boxes. Unmade sales, obviously, hurt the company's coffers, but analysts are starting to weigh in on exactly how much that figure may be. While people search for Wiis that Nintendo can't sell them, many wily individuals have been taking advantage of the situation to help line their own pockets.

“It’s pretty amazing,” Jim Silver, editor in chief of Toy Wishes magazine and industry analyst for 24 years, said. “By a year later with hot items, inventory usually catches up.”

“It’s staggering,” said James Lin, MDB Capital Group senior analyst. He estimates that Nintendo are losing $1.3 billion in unmade sales. “They could easily sell double what they’re selling.”

Nintendo ship 1.8 million units worldwide, up from 1 million last month, a third of which go to the US. The company doesn't feel that it has done anything wrong in its planning, however. “We don’t feel like we’ve made any mistakes,” said George Harrison, senior vice president for marketing at Nintendo of America. “It’s a good problem to have,” he said, but acknowledges that there may be a downside. “We do worry about not satisfying consumers and that they will drift to a competitor’s system.”

The GameSpot chain of stores makes up for around 28% of video game sales in the United States, and believes it could double or triple its Wii sales if the shelves in all of its stores were filled. GameSpot's senior vice president for merchandising, Bob McKenzie, says the company has stopped telling stores when to expect their weekly shipments of the console. Word gets out of the delivery date, he said, and “then people start doing crazy things, like putting up pup tents.”

According to Lazard Capital Markets analyst Colin Sebastian, around 86,000 Wiis have been offered for sale on eBay since the fourth of December, with an average selling price of $320 US, 28 percent higher than the retail price.

Some believe the company is deliberately keeping supply low to help maintain a buzz around the product. If this is true, they believe that Nintendo risk losing customers permanently as those who are buying one for a gift may not buy a console in the new year.

“Nintendo is afraid that if it makes too many Wii, the boom may crest too quickly,” Masayuki Otani, an analyst at Maruwa Securities in Tokyo said. “It doesn’t want to satisfy all demand right away.”

Link http://www.aussie-nintendo.com/?v=news&p=20234

 

 

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I feel vindicated after all the vitriol I received on this thread http://www.vgchartz.com/forum/thread.php?start=50&id=12035. Analysts say the same thing. Analysts believe Nintendo could have sold double, as I implied on this thread. A huge, gigantic opportunity missed by Nintendo. There is no doubt Nintendo could have had 30+ million in people's homes today. If Nintendo established such a userbase so early on the Wii would have been clearly the winner hands down and most likely got many of the 3rd party 360's and PS3's games such as Resident Evil 5 or Grand Theft Auto 4 which would have increase demand for the Wii even more.

Nintendo knew how hot their console was when they didn't stockpile any during the summer. Right then could have been the time for Nintendo to really churn those Wiis out in time for the holidays. Also considering they are introducing the console to more Asian markets, it's really foolish not to ramp up production even higher. 1.8 million a month is definitely not going to cut it.

A huge, huge, huge opportunity missed by Nintendo.