@seece: Do you know what eventually caused Dreamcast production to end? The 50% of all DC:s manufactured (the time DC was discontinued) standing in Segas warehouses due to lack of demand. That's a shitty situation that any manufacturer of any product wants to avoid. Including Nintendo.
From Nintendos statements we know that it takes five month to ramp up production, add one month for shipping, before the increased stock hits market (and it's a limited number they can increase the supply at a time).
Now that there have been supply constrains, market "sucks" the increased supply right away, so they need to wait a while before the demand settles.
And Nintendo actually did increase Wii supply pretty aggressively. Keep the five months in mind;
Before launch (-11/06), Wii was manufactured at a rate of 500k a month.
At the time of the launch, production was upped to about 1M a month (11/06-).
3/2007, Wii production was upped to 1,3M a month.
Around 8/2007, Wii production was upped to 1,8M a month.
Around 9/2008 Wii production was upped to 2,4M a month.
As you can see, from the start of second half of 2006 to early second half of 2007 Nintendo was basically constantly ramping Wii production up.
After the ramp up to 1,8M in 2007, Nintendo was looking what the market looks like after the christmas period, when market settles. The next ramp-up from 1,8M, would take Wii production above the production rate of any console ever, so there clearly wasn't anything you could use as a benchmark for the demand.
1,8M wasn't enough, so the next step got a green light. If the current 2,4M rate isn't enough, production rate will go up sometime in the summer/fall and that time, the production rate may be on its own "millions".
