Wii Shortages

In an interview with Home Media Magazine, Video Game Analyst Billy Pidgeon had some fairly interesting numbers (and, er, theories) to share.  Nintendo moved 259,000 Wiis last month, not a suprising development considering overall hardware sales for the industry have doubled from $659 million to $1.3 billion between Q4 2006 and Q1 2007.  According to Pidgeon, the sales on 360 and PS3 are stagnating, largely due to a lack of system-selling games.  This is due to pick up in Q3 when a number of highly anticipated titles are scheduled for release.  In the meantime during Q2 though, Nintendo has an opportunity to sweep with the Wii, that is, if they could keep them in stock.

And herein we see a problem.  Why are Wiis so hard to come by?  Pidgeon believes supply won’t reach demand until 2009 (Personally, I find this difficult to believe).  So far this year, Nintendo has managed to sell more gaming systems than everyone else combined, along with a heft chunk of peripherals to boot.  Since its release in November 2006, the Wii has sold over 2.1 Million units in the USA alone (Nevermind in Japan, where the Wii has consistently been the top selling next-gen system).  Sony can’t even close to match these numbers, and Microsoft, who’s had the 360 out for a year long than the Wii has only managed to sell 5.3 million units. 

So it’s possible that the appeal of the Wii to an audience outside of mainstream gamers has resulted in an insatiable demand for the system.  Certainly there’s been no mention of supply chain problems such as the ones Sony has suffered with its PS3, in fact, Nintendo reported in October that Wii production had exceeded expectations.  Even so, five months after the release of the system, one study showed that of 100 American game stores visited, only one had a single Wii in stock.  It’s basically impossible to order one from an online retailer, as all the major brands show the Wii being out of stock.

This is not a good scenario for Nintendo.  Despite rumors that Nintendo may be artificially constraining supply to ‘generate demand’, economics don’t tend to actually work like that.  They are in a position to take advantage of a low point in the year as far as game releases go to sell their system, but in order to do so, people need to be able to get their hands on one, and Nintendo will want them to do so before the fall line-up starts pressuring people to move towards PS3 and 360.

Even if Nintendo had not anticipated the rampant demand their system has created, one would think given five months they would be able to scale up production to accomodate it.  I suppose it takes some time for the reality of the situation to make it up to the decision makers.  Nintendo did announce recently it was going to increase production line capabilities, but no specifics were mentioned. 

I just want to play Zelda without having to wait in line all morning.  Please?