Honestly, I think the Wii will still do fine, even with massive supply.

But there is merit to the "keeping up with the Joneses" logic of when little Billy wants a Wii because little Tommy wants one and they're hard to find. When an item is sought by some, it becomes sought by many by simple means of transference: if it's hard to find and people want it, other people become curious as to why so many others want it. 

In the Wii's case, I think it has a while to go before it even has to worry about that, but the Wii probably wouldn't be the "hot item" if it was easy to find. 

 The first maybe six months there was a Wii supply issue here in Sweden, but not really because the demand was insane. The demand was OK, but the supplies were small. 

In begin off the yeare there was a supply issue in germany as well, but that was done by march-april.

I personally find it intresting that it seems that nintendo meets demand in whole europe, except UK.  

I would think that as soon as Wii sales worldwide are only 80% of what supply is, then we may see Nintendo stopping the production increases. At least until a shortage is expected again, or sales go back up.

Maybe you see a lot more DS then Wii because they are easier to manufacture.  have you thought about that.

just to help clear up the total value of Sony and Nintendo argument, Market Cap is the value of nintendo in the Equity markets, Nintendo has no dept which really helps them in this area so all of their value is in equity(stocks).

You really can't base value on assets alone, many airlines are going bankrupt but they have billions of dollars of assets. The problem is that you can not really put a value on intangible assets(such as Brandnames like Wii) that is where market cap comes into play stocks are value by how much people are willing to pay for them, and the fact that Nintendo's market cap is so high means that investors see Nintendo as being worth more than their assets.

This bringsup the issue of Nintendo being overvalued in the same manner as dot- com's of the late 90's, what you need to look at it price earnings ratio, if it is under 15 then they are undervalued(unless there is a specific reason for that) a good number is 15-30, higher than 30 can be considered speculative, which is not bad, but that means people banking a lot on the future and just just the present numbers.

I dont have the price earnings ratio but if some wants to look it up it is a company's Stock Price divided by earnings per share.

In conclusion, sony has 3x the assets so NOW they are more valueable, but N's 2x market caps mean investors think N will EVENTUALLY be more valuable than Sony.

@toki,
Nintendo forecast ¥2.150 per share, shares are at ¥67.700, so the P/E ist at 31.50. Pretty solid for a technology company.

@Nick,
I think the Wii will be very available by March. I just can't imagine that they will actually sell 1.8 million per month after Christmas.

@OP,
It's not really that they couldn't have ramped up higher for Christmas, it's more that they would have problems after Christmas. It took them a while to find out how big demand really is, which is almost impossible to do while you're sold out. They are at 1.8 million now and, assuming for the time being that demand will not rise any further, that should be enough to build some stock for Christmas 08. And it's not like they don't offer any Wiis at all. Look at TheSources' news report, American retailers sold more than a Million Wiis in November. Just try harder!

Another thing to consider is that the value of all stock are speculative being that you're (essentially) buying a stock because you believe that it will be worth more in the future. Much of the asset valuation is meaningless because very little of the physical assets will be worth anything in 10 years, and you can quite rapidly destroy a brand and devalue IP assets. The value of Nintendo's stock is so high because Nintendo is so well managed at the moment that people expect them to be a much larger company in a couple of years will assets which are much more valueable.

 I may have missed the end of this comment.... but... I revive it.

Just because "a" company is worth 300 quadrillion dollars does not mean it even profits ten.

Just because the United States is as it is, does not mean the national debt is not skyrocketing.

Just because you have assets doesn't mean you are in a favorable position to make money....

Sony's first half of the current year:  140 billion yen profit on 12.5 trillion yen.

Nintendo's first half of current year:  132 billion yen profit on 1.65 trillion yen.

So you tell me.  Your numbers against mine, Sony profits 0.0112 yen per 1 yen asset.  Nintendo makes 0.08 yen per 1 yen asset.

That's a ratio of over 7:1 efficiency of Nintendo:Sony.  Seven times more profit based on asset.  Seven!  that hurts.      7.15 x 1.65 = 11.8.  If you take Nintendo and Sony side by side and compare an asset 'rating', you get Sony with 12.5 trillion yen, and Nintendo with 11.8 trillion yen.  I'm not sure this all really matters, assets.

No, no my friend, that's not clear cut formidability.  It's only vague fact without any other partaining facts.  I may be the King of Facher House, and Kings make a lot of tax money, but this King of Facher House is only worth a small house worth, and certainly makes less than a respectable share of anything   But I am still King of Facher House....  that MUST mean I'm great, right?