Ok well I know this was a long and hotly debated topic but I want to be clear that this shouldn't be taken as a slam against anyone, I am posting this as a means to clearly highlight that even under extreme supply constraint Nintendo still was able to stockpile and that this is an extremely common practice. In the future this should surprise noone and hopefully this will serve to end those future debates before they even get started.

*NOTE I am assuming 400k for final week in japan, being off by +/- 40k at most will have negligible impact on any conclusions.

Since it has been noted several times that Wii Production has been at 1.8m since August it should come as no surprise to most people that simple math will show that only 5.4m consoles would normally be available during Q3 (Oct-Dec). When you consider that the console was sold out during the Oct through Dec period constantly it makes one wonder how out of 5.4m consoles available some 7.25m made their way into consumer homes. And of those 7.25 an astonishing 4.58m of them were sold in Decemeber alone. And even more if you wish to count the last two days which will be included in next week. Lets just look at the breakdown shall we...

Second Quarter
July - 1.12m
Aug - 1.07m
Sep - 1.16m
Total - 3.35m

Third Quarter
Oct - 1.02m
Nov - 1.65m
Dec - 4.58m
Total - 7.25m

So looking at this it is fairly obvious that there was some units being shifted around, and closer inspection naturally requires us to ask where the additional 1.85m units came from. We arrive at 1.85m because there were 7.25m sold with only 5.4m available. Now with that said, the astute amongst you will immediatly recognize that back in August and September there was less than 1.8m units sold. That fact, along with some quick math, tells us that for Aug & Sep around 1.37m were not accounted for.

This of course still leaves us with around 0.48m units to account for if we are willing to allocate all of them to Holiday stockpiling, which may or may not be the case but it seems logical that a majority were allocated to that task. There are of course various theories to account for the remaining 0.48m units but it seems likely that at least some of these came from the June & July timeframe while production was ramping up to 1.8m. We all know that there isn't a magical switch that just turns on extra supply so it is reasonable to conclude that as production was increased these extra units would be available.

The other theory to help account for that 0.48m units is that some of the US supply for January was expedited to arrive early in time for the holidays. This has its limitations as it would be fairly difficult to push more than a week (at absolute most two weeks) worth of production forward, but it could still account for some increase.

No matter what theories you subscribe to or how you slice it, it is plain and simple impossible for there to have been no stockpiling. At some point there had to have been stockpiling or the sales numbers achieved simply could not have happened. You can call it a "Seasonal shift" or "Strategic Reallocation of Stock" if you wish but they all mean the same thing. Stockpiling.

So in the future it should hopefully be a given that even when a console or handheld is absolutely sold out there is still going to be some stockpiling for the holidays as it is a fundamental part of the electronics holiday strategy and likely always will be.

I also wanted to comment that this doesn't mean Nintendo or any other company that does this is evil and they aren't hiding stock from summer consumers just to annoy them. It simply means that they recognize the difference betweeen these two customer pools and they understand that their summer customer is far less fickle than their Holiday customer.

I'm sure this doesn't comfort anyone who has been searching for months to find a Wii, but these are businesses and maximizing their market share is one of their primary goals. Ultimately increased market share will aid the consumers as well when it wins over 3rd party support and brings new games to the console but it can be hard to look that far forward when all you want to do is get your hands on one of your own.

Feel free to add your own thoughts and/or theories folks.

How do you know they didn't up production?

Because they said production was at 1.8M a month and wouldn't be looking at upping it further until after the holiday season was over.

 Yeah, they said that, but did they stick to it?  They also said they weren't stockpiling and yet people are so ready to dismiss that

The real question was if Nintendo would be able to have enough Wii's to comfortably sell in the holiday season and the answer is no.

Didn't they say that they were not stockpiling to increase demand?

IIRC their production numbers were in their quarterly reports which would mean that they cannot (legally) lie about them. But for further evidence you only need to consider Nintendo's long history of conservative decision making and it quickly becomes clear what happened.

That and well, its sort of hard to hide the fact that you are upping production without people noticing, it is not a small scale effort.

edit: Also Reggie stated it takes them 5 months to up production, if they started the process again at the end of August it would likely be at least 3 months before any extra production started showing up so Sep, Oct, and Nov would be the same with December showing maybe an extra 100k total?  So that seems highly unlikely especially since they wouldn't have had any time to assess their most recent increase at that point...I just don't think they would up production again without seeing what their most recent changes have done first. 

But still an excellent question and a point worth covering.

Sqrl...you rock.
Amazing write-up and I think you've really hit the head with this one.

I wonder if there are still some in the stockpile reserves...for the release of three hotly anticipated games: Wii Fit, Mario Kart, and Smash Bros. Or maybe the 1.8 million a month is satisfactory to meet demand.

Also....how much does Nintendo have to stockpile if they are going to try to roll out new colors? Wouldn't they have to wait until they had at least 1-2 million of the new color before they could introduce them to the market? There's 1-2 million that they would be producing yet not selling. This would have to be offset by a stock reserve to sustain the sales.

 See the thing is according to the data you supplied since August they had 2.3 million set aside, adding in the 1.8 million for december and you end up with 4.1, much less than the 4.58 they sold in December, now couldn't they have shifted from earlier months you say, unlikely since if you look at VGC numbers they sold 16.24 this year take away 10.6 for July through Decmber according to the data you supplied and you are left with 5.64 million, yet according to VGC the figure for sales is 5,968,442 until the first of July, so they wouldn't have had any supply availible to shift from other months