I find it hard to believe that they couldn't forcast demand despite its performance in Japan.  This isn't exactly a complex piece of electronics and likely could be produced in the tens of millions if needed by factories in Asia.  I really think if there hadn't of been a 360 price drop Nintendo would have pulled the same trick with the Wii.

http://www.gamesindustry.biz/articles/fils-aime-admits-wii-fit-supply-will-fall-short-this-christmas

Fils-Aime admits Wii Fit supply will "fall short" this Christmas

Nintendo's Reggie Fils-Aime has said that there will not be enough supply of the Wii Fit peripheral to meet demand this Christmas.

"With Wii hardware, I think we've got a good shot at meeting demand during the holidays," Fils-Aime told Forbes. "With Wii Fit, I know we'll fall short."

He also said that he doesn't think a number of third-party Nintendo developers fully understand the potential of the Wii, leaving them unable to find success with their products.

(more at the link)

Umm you do know that Nintendo doesn't produce every part that's needed to make a Balance board?

Doesn't matter if they have millions of parts of everything if they only have 1000 of one, then there can't be more then 1000 Balance boards produced.

2 Years on and you would think they could get it right ... the demand is there so what on earth is stopping them?!

Legend, get over youself. The Wii and some of its games are just that popular.

According to this site, Wii Fit sold over 1.25m units in the past 4 weeks. That is more than most games do lifetime. Do you really think Nintendo wants to restrict how much $$$ they can make this holiday? If they don't get Wii Fits on the store shelves, then they may not recover the lost sale. This doesn't matter if it is holiday sale or not. I already know a few people who said they aren't even bothering to look for a Wii, and if they see one in the store in the future they MAY pick one up, but they don't care any more.

Yeah! Why don't they spend a few 100 million dollars on a new factory and hire extra employees so they can meet demand for a year then when demand would drop so you don't have any need any more for the new factory and the extra employees.. so you wasted a few millions dollars.. yeah why wouldn't they do that??

Lets see, they started with ~0.5m/month (before launch) and are now producing 2.4m/month (current), and will probably increase it again next year to 2.8m/month (my guess).

What is stopping them is unprecedented demand. The PS2 never saw this level of demand, and people (who I think are stupid) still predict that sales are going to drop off (as in completely stop) in 6 months, so why increase production?

Because like you said, those people are stupid and demand isn't likely to drop off. Nintendo need to strike whilst the irons hot, its the in thing to have. IF that is going to change then they need to sell as many Wii's now as they can. If it isn't going to change and wii continues to sell like crazy then there would be no harm in raising how many wii's are made.

You can bet your bottom dollar if Sony or Microsoft were in this position they would do everything they could to meet demand.

If anyone's to blame, it's people for buying them. But of course the hardcore claim they aren't flocking to the Wii, so this reason is somehow impossible.

EDIT: And Nintendo can't just make more parts and factories overnight. Get that through your heads.

Well, they have upped production ~2 times per year, which is pretty decent in my book, and like I said, I expect another 0.4m increase so they are guranteed to meet demand next Christmas.

Well, they're somehow managing to just meet Wii demand this year--making around 2.4 million/month and selling around 2.2-2.3.

Wii Fit is a very complex piece of machinery, that's all I can say.