Someone mentioned this before and the question just popped up, with what little I know about supply and demand, there are two sides to this coin.

consumers who generate demand

producers who generate supply to meet the demand.

What functions as a counter-balance is that no resource in the world is unlimited, which is what the producer may need to satisfy consumer demand. When demand is higher than what can be produced, to mediate this an increase to the value of resources goes up. (This happens ast he producer is also a consumer when considering they have to purchase those resources needed to generate supply for their consumers.) This in turn leads to high cost of the initial product in demand.

Nintendo doesn't follow this model nor do their 3rd party suppliers... how are they making a $60 profit. When demand is so high!?

By the way this entire OP is pretty rhetoric and I know.

They make their profit just as easily when demand is high because that is the market capacity they are aiming for. Your comments are more related to the fact that it isn't so easy to increase production. and at the same time maintain that price point and profit level.

As for the higher price, this is where ebay fits in the picture in providing that price increase with additional middle men... also leads to increased inefficiencies with double shipping, etc... and why in general price controls are not the best practice.

unless nintendo want to dig their own grave then they'll increase the price of wii. Lets not go complicated with elasticity of price or unit profit vs total profit why it can be more harm than gain for a price increase. We'll look at the simple fact of brand reputation as it is one of the most important thing to a company, because getting consumer happy and satisfied will affect future purchase decisions. for e.g. you would rather buy a no name brand of a laptop or you would buy a sony Vaio for the same price???? thats where brand reputation comes into play.

Are you kidding me? That is such a bad PR move.

lol, that's true, motion-controls should be more expensive as they are high-technology!

@Leni with the logic used then yea they actually are.

>.> People make value if no one wants it then might as well it be dirt.

This has been discussed tons of times last year. Yeah, Nintendo probably wishes they had launched the Wii for $300. It didn't happen though, so it's a moot point.

Except, that creates a lot of confusion. One week the Wii is more expensive than the HD consoles, the next it's even cheaper than it used to be. Perhaps it wouldn't work just like that, but the Wii is known for being the cheapest console (well, at least in America where it holds a lot of popularity) and if it's then known for having a flip-flop price, than that's going to hurt its image a lot.

I honestly thought the Wii was going to cost $200 at launch!!

Nintendo should flood the market, announce a price increase, sell all existing product, and then sell a new hard-drive enabled DVD playing version for $300. Then, after I buy that version, they should drop the price to $250.


........but that's just plain evil.

terrible terrible idea