Analyst: Small Wii supply costing Nintendo big

  • By Polybren, GameSpot
  • Posted Dec 14, 2007 12:44 pm PT

It's no secret that Nintendo could sell more Wii systems than it is managing to put on store shelves. More than a year after the Wii launched, the system is still a hard-to-find item, and the New York Times today is reporting on the motion-sensing game system's second straight holiday season as the...

It's no secret that Nintendo could sell more Wii systems than it is managing to put on store shelves. More than a year after the Wii launched, the system is still a hard-to-find item, and the New York Times today is reporting on the motion-sensing game system's second straight holiday season as the must-have gift.

While the story remains the same--long lines of eager customers going to extremes in often futile attempts to secure a system--the paper puts a new price tag on how much the lasting shortage is costing Nintendo this holiday season. The Times says analysts and retailers have pegged the cost to the console maker at over $1 billion in hardware sales alone. MDB Capital Group senior analyst James Lin estimated that Nintendo was shortchanging itself $1.3 billion because of its inability to deliver more Wiis to retailers.

"It's staggering," Lin said. "They could easily sell double what they're selling."

During the month of November, Nintendo sold more than 981,000 Wiis. Nintendo of America president and CEO Reggie Fils-Aime this morning pledged that Wiis would be available next week at all major retailers. However, anticipating sellouts, the console maker also announced it would be instituting a rain-check program at GameStop to address supply shortages that are expected to continue into 2008.

197 Comments

  • jknight5422

    Posted Dec 20, 2007 7:23 am PT

    I'm glad I don't care about the stupid Wii. That's a woman's console. Lot of crappy, uninteresting games for it. Everyone that I talk to that got one told me they got it "because their wife was pestering me about it" or "my wife wanted to get one for the kids", etc...I bet none of these gals ever play it. It's a conversation piece because "it's so difficult to find"...lord heaven's be!

  • HU_Tessa

    Posted Dec 19, 2007 1:50 pm PT

    nintendo wii is doing us a favor to take advantage of supply and demand! those ebay people are really raking in the money @_@

  • Peaches1347

    Posted Dec 18, 2007 3:11 pm PT

    The wii is a kool console but its fun kinda dies for people who need good games and not just franchises tht are good

  • KBABZ

    Posted Dec 18, 2007 7:30 am PT

    Alright, so the Wii is selling like hotcakes. Now where are those GAME sale figures?

  • Sonicgod

    Posted Dec 17, 2007 4:46 pm PT

    How many are getting shipped back to be repaired using parts that could go in new wii?

    Mine broke 7 months after launch.

  • Pete5506

    Posted Dec 17, 2007 3:54 pm PT

    wow I am glad I got mine

  • Pat3ot_basic

    Posted Dec 17, 2007 12:47 pm PT

    Let's be clear on a couple of things here:

    1) Nintendo is not losing money by failing to produce more Wiis. If you see a dollar lying on the street, and you fail to pick it up, did you "lose" a dollar? No, you simply failed to gain a dollar.

    This brings us to 2) The fact that Nintendo could sell more Wiis if they were producing them does not negate the argument that Nintendo is holding back. This is the second Christmas that has seen Wii shortages. You're telling me that nobody at Nintendo looked at the business plan and said "Hey, you know, demand has been pretty constant for the past year and Christmas is coming again. Maybe we should contract a fab house to build some more?"

    It's probably not malice, but Nintendo has something wrong with it's business plan.

    3) Nintendo does not have to build it's own factories to build Wiis. In the semiconductor industry, companies that design but don't manufacture their own products are so common there's an industry term for them: They're called "Fabless Companies." There are any number of contract manufacturing houses that Nintendo could contract on a short term-- or long term, for that matter-- basis to make up the slack. My company uses them all the time-- we only build prototypes here, after the prototypes are vetted they go out to a manufacturing house with a bill of materials and a set of guidelines on how to assemble them. I'd be surprised if they're not already doing this.

  • joshuarocker

    Posted Dec 17, 2007 10:41 am PT

    I have seen first hand the effects of not having the system on the shelf. My Boss at work really wanted one for his family. He tried to get one for several weeks. He never camped out or anything, but everytime he went to a store he ran by the electronics counter and of course they were always sold out. For a few weeks he kept talking about it, how much fun it would be, how his whole family was going to start having "game night". Fast forward a few months. Now whenever the Wii comes up he doesn't even care. He said he's given up and doesn't plan on buying one anymore. The big N lost out on his money. He did briefly ask me about a 360 or PS3 but didn't really want one and decided to stick with his dust gathering PS2. To me he is the picture of a casual gamer. I have to wonder how many other "casual gamers" out there have also given up and will probably never buy one.

  • uklegendkiller

    Posted Dec 17, 2007 10:14 am PT

    I'm loving my Wii at the moment, it's a fantastic little console and has really taken me by surprise. It's a shame Nintendo can't get more out for the holiday period it'll more than likely cost them xmas war.

  • RiVeX

    Posted Dec 17, 2007 10:02 am PT

    I completely agree with bigmick, it is really fun when you first get it, but after a while it just kind of loses its novelty. Don't get me wrong, its a great system and there are some great games. It just kind of seems like a token fad that may be dying down (at least for me) I just don't play it as much as I used to....... its kind of like an old board game that I only break out for parties. I think that with shortages, hardcore and casual gamers alike may be going someplace else for the holidays...........

  • qiwihead

    Posted Dec 17, 2007 9:59 am PT

    When it first came out last year, I was suspicious that they were keeping production artificially low to drum up hype due to shortages. But seeing as how they could be making so much more money if there wasn't a shortage, it would seem this was not some ploy to build hype. The Wii doesn't need any more hype at this point. As a side note, a friend of mine in Rhode Island has bought 5 units in the past two weeks from local stores. He sold 4 of them on Craigslist for up to $400 each. Needless to say, the 4 he sold paid for the one he kept. So no, they're not impossible to find if you're determined!

  • Nomad0404

    Posted Dec 17, 2007 9:29 am PT

    It strikes me that the lack of Wii's on shelves is driving the frenzy for getting hold of one to higher levels than would be there if there were 20 on the shelves constantly in every major outlet in every country.

    If they were easy to get hold of people wouldn't bat an eye lid but because they are pretty damn difficult to get hold of it's big news even in the mainstream press and that just fuels demand.

    Calling this the 'Must have' xmas toy is also driving demand up as well.

    Bizarrely though someone is still trying to work out a way to bash them even when they are set to sell over a million in a month!

    I say go Ninty!

  • cancer_777

    Posted Dec 17, 2007 9:27 am PT

    PENGUINKK Thats supply not demand. BTW what he probably menat was that the fist few months they did not anticipate such a high demand so they did not produce as many as they could. Right now they are producing as many as they a re capable (yes they could get more factories to work but that would mean a higher quality control logistic which they probably cant muster so they cant produce more wiis during the holidays)

  • Bench_Scientist

    Posted Dec 17, 2007 9:09 am PT

    Nintendo isn't losing money. They are just not getting as much money as they could in any given month. The people that want a wii will still buy one when it becomes available. This gives them time to complain to their friends about how bad they want one. aka free advertising. $20 says this becomes the newest marketing scheme...that is until you sheep catch on to it.

  • JackfnBurton

    Posted Dec 17, 2007 8:21 am PT

    Everyone's an expert - I like listening to the geniuses in here whine about how stupid Nintendo is. Come on, how could they or anyone possibly have anticipated what a runaway hit this thing would be? They're selling a million a month and could be selling TWO million? The Beatles never moved merchandise that fast. Give em a break. It isn't like you don't have anything to do with yourself just because you don't have a Wii. They'll make more soon enough - besides, you'll probably get sick of it six months after you get it anyway. Relax. At least they're running short for a GOOD reason.

  • MasterChief725

    Posted Dec 17, 2007 8:04 am PT

    I will wait for super smash brawl to judge the wii

  • OGNeo69

    Posted Dec 17, 2007 7:24 am PT

    Yes, if your dedicated, as with anything in life, you can secure a wii. My boy and I went early one Sunday back in January and I found another one in the mall one day in July while not even looking. The second was for my brother. I'm just saying that it isn't as hard as people are making it out to be. Yes there is a shortage but if you really want one, chances are you can get one. No you won't be able to just go to best buy at 4pm on a saturday and pick up one but I imagine that will be a reality pretty soon. Good Luck All! (oh and btw as a small retort to those boasting thier xbox and ps3 playing more than their wii, you are apart of the problem, you are a part of the hype which has helped create this shortage. Shame on you when there are sincere people out there who truly want one of these consoles to play with their family and friends. This console wasn't made for you it was made for them.)

  • xgalacticax

    Posted Dec 17, 2007 5:39 am PT

    there is no way nintendo could have predicted the wii will be so popular. i mean its power cannot be compared to the ps3 and 360. they would lose more if they made too many and it ended up like the gamecube, so dont blame them. all they can do now is open up more production factories to increase rate of production.

  • thekey

    Posted Dec 17, 2007 4:56 am PT

    I think this shortage is BS.(artifiical demand does wonders) Yeah the Wii won. This shortage is just going to make people want it more.

    By the way I really HATE the Wii!

  • bmanva

    Posted Dec 17, 2007 4:34 am PT

    It's like any fashion trend, it's crap but people will still want it because they can't get it. Only after getting it they realize it's worth neither their time or the effort in getting it.

  • 15th_archangel

    Posted Dec 17, 2007 12:59 am PT

    My friends all laughed at me for camping for my reserve back at launch, guaranteeing they would waltz into a store and walk out with a Wii. Several of them are still Wii-less and still trying to get them. Needless to say even I didn't expect demand to reach this incredible height.

  • ArchAngel2284

    Posted Dec 16, 2007 8:06 pm PT

    glad i got mine back in april. heh.

  • IKKF

    Posted Dec 16, 2007 7:44 pm PT

    Who cares that analysts believe that the Wii is costing Nintendo a lot? It seems to be making a hell of a lot more money than it costs anyway.

  • QuakeOne

    Posted Dec 16, 2007 6:43 pm PT

    I work in retail so I'm one of the people getting asked "Do you have any Wiis in stock???" at least a million times a day. When we do get wiis its about 10-20 at a time and they sell out within half an hour. I've never known anything to sell like it this long after been released Nintendo are doing a great job of selling the Wii to the masses with advertising and such but no such a great job of supplying the consoles to match its own marketing........I have a Wii and it is an awesome machine, perfect to have around for question but i just hope that the people that can't get a Wii DO look at the possiblilty of something like a 360 or PS3 instead as all games consoles have their strengths. Either way it's been a great year and festive season for games without a doubt

  • kangaroossuck

    Posted Dec 16, 2007 6:23 pm PT

    it seams to me that nobody here agrees with eachother because everyone here wants to be right. no one here is a part of nintendo you are all a bunch of kids with conflicting interests.nobody knows the truth but nintendo. so everything i read is a possibility

  • MetalHead48

    Posted Dec 16, 2007 6:10 pm PT

    i dont play my wii that much there are some awesome games, but they arent as awesome as some on the 360

  • MetalHead48

    Posted Dec 16, 2007 6:09 pm PT

    i have a hard time understanding nintendo's economic strategy at this point. with such a technologically simple system and nintendo's weath, it is obvious that they could produce more than they are. maybe they want to keep it as the item to get over the holiday season and they feel that if they produce a sufficent amount so anyone can simply walk in and buy one. they must think that the shortage of systems is keeping it the most sought after gift

  • DCrocks

    Posted Dec 16, 2007 5:51 pm PT

    I was lucky enough to get one last December, and I've enjoyed it even though it hasn't provided as much overall fun as my 360. Anyway, I would imagine that after a year of the Wii being in high demand, Nintendo would be taking more advantage of that fact if they could. As someone said earlier, demand doesn't mean much if you don't turn it into dollars.

  • The_AI

    Posted Dec 16, 2007 5:08 pm PT

    Analysts are only professional fanboys.

  • gameguy6700

    Posted Dec 16, 2007 4:46 pm PT

    Good. Its painfully obvious that Nintendo has purposely been keeping supply low in order to drum up massive interest in the console. Normally I wouldn't say stuff like that, but come on. No console in history has been so hard to find this long after launch. Its normal for a console to be hard to find for a few months after release but never for over a year. Either Nintendo is causing this shortage on purpose or they need to fire the incompetent morons who don't know how to anticipate demand.

  • Zoomer30

    Posted Dec 16, 2007 3:55 pm PT

    I think Nintendos big issue is that they have nothing new to bring to the table. They come out with a new system and what do you get? Yet another version of a Mario game. How many different Mario games have there been? A million? Oh and Zelda. Ill take my PS3 anyday, thanks.

  • coolcat888

    Posted Dec 16, 2007 3:15 pm PT

    I'm glad the Wii is selling so well. Don't get me wrnong, the Wii is an awesome system. I have one, but after I bought it, I played it for two weeks non-stop, then after that, I didn't want to play it anymore. I was just bored with it. The motion sensor is pretty inovative, I just don't like it enough to give up gamebads. I find myself playing my PS3 more than my Wii.

  • SMR-Venom

    Posted Dec 16, 2007 2:37 pm PT

    Wow, the other day I went to Best Buy to get an Optical Mouse and I looked at the front entrance and there was a huge sign. "We will not have any Wii's until Dec 16th" I remember when i was so lucky to find one. I went to Best Buy in like June this year and saw like 15 on the shelves, at like 1:00 PM. I feel sorry for the people trying to get it now. even the Nintendo World Store on NYC is having shortages! Even though Nintendo is making a huge profit already, if you look at how much they CAN make, it looks like they are taking a loss. Each Wii system gets them $40 of profit and not to mention the games!

  • CaptainHerlock

    Posted Dec 16, 2007 2:00 pm PT

    Didn't these same "analysts" make a similar prediction last year?

  • Dace67

    Posted Dec 16, 2007 12:42 pm PT

    I'm surprised there is still so much demand... Glad I got mine day one. *rushes off to play MP: 3*

  • DesertSpada

    Posted Dec 16, 2007 12:38 pm PT

    Pathetic. I don't plan on waiting even more months looking for this thing. If they don't ramp up production then I might just invest my money with another system. This is ridiculous.

  • fauljosh

    Posted Dec 16, 2007 9:51 am PT

    Nintendo should flood eBay with Wii auctions selling them for 249 with free shipping. That would stop people from buying them and selling them on eBay. Am I the only one that realizes this? Any time a new console launches the manufacturer should sell like 10,000 on eBay. It would help curb the scalpers.

  • Flavour666

    Posted Dec 16, 2007 8:35 am PT

    The shortage is attributed to sheer incompetence on Nintendo's part. There actually is a shortage of Wii games and accessories (the Wii itself is easy to get in any store) here in Germany. It's impossible to get Metroid Corruption. They are too incompetent to press DVDs! It's mindblowingly stupid. DVD factories can spew out about 100,000 DVDs *PER DAY* but it seems Nintendo manufactures them in Japan and ships them back to the different countries when they feel like it...

  • Boat3600

    Posted Dec 16, 2007 8:23 am PT

    How hard could it be to make a Gamecube with motion sensing?? Thats all it is really, with a bit pretty graphics. Yet they are having supply shortages? Please. Nintendo is just building up more anticipation to blow the competition away once the shipments come in.

  • DuaneDog

    Posted Dec 16, 2007 8:19 am PT

    I managed to get a Wii this summer and it truely is a very capable platform. I've played it on and off and picked up Super Mario Galaxy which is a fun game to play for a while. I'm still spending much more time on the 360 than the Wii but that has muc h more to do with the quality & quantity of games than the Wii itself. From a hardware standpoint the Wii is a huge breakthrough and I only hope we see more games that really integrate the strength of the Wii controler. Super Mario Galaxy for example is fun, but I think he Wii could be so much more with the right genre/game control scheme. There are good games for Wii but just nothing compared to what we are seeing on the 360. Some of this is power but I think it more has to do with the big developers also way underestimating the demand for the Wii. Poor attachment hurts bringing more developers in but I think poor attachment is mostly because of developers in the first place. It's a visicious circle. For example I ended up with Bio Shock, Assassian's Creed, Rock Band, Mass Effect, Halo 3, and Call of Duty 4 for my 360 just in the past 2 1/2 months. I have about 20 Xbox 360 titles in all. Super Mario Galaxy and Zelda is all I have bought for the Wii. Wii does have pretty good games but the competition this year just had some real knock out games. Developers need to step up and do the Wii's innovation justice in quantity and quality.

    One good things is I think In general we are seeing a move toward bringing gaming into a more active form. We are seeing Rock Band's huge success despite it's price tag. It has to do with really putting the gamer into the game besides just a thumb and finger in each hand. Two thumbs up for Nintendo. Now lets see all these developers meet the demand for quality game software on the platform.

  • savagetofu

    Posted Dec 16, 2007 8:11 am PT

    The only thing nintendo really should do better is contacting the stores with how many units they are getting so stores can more effecitvely advertise what products they have in stock.

    I don't consider all fault for nintendo however just because this is the first time anything of this nature has happened.

    Also customers are not just competeing with people who want a Wii but people who want to sell wii's on online auction sites as well as people who are useing the wii for health purposes such as in rehabilation clincs.

    I for one am very glad I stood out in the snow for over 5 hours last Dec 17th & snaged one.

    I will never buy a 360 or ps3!

  • vdarkfall999

    Posted Dec 16, 2007 7:36 am PT

    I'm confused. If Nintendo could "easily sell double what they're selling" and not doing that has cost them over a billion dollars... why aren't they selling more? I swear, I don't understand Sony or Nintendo anymore. Both of them seem to think all the horribly damaging decisions they make are somehow beneficial.

  • Neo9898_98

    Posted Dec 16, 2007 6:30 am PT

    @bigmick07:

    Yeah, the problem is that it's store policy to not tell customers when the shipments come in, so you obviously don't know what you're talking about.

  • carpeaqua

    Posted Dec 16, 2007 5:45 am PT

    I think the allure of the Wii is more than the actual payoff. I lusted for one for months and now that I have it, it seems like a $250 bowling game. If I have a choice of getting a game on my 360 or Wii, I almost always choose the 360. Other than the platformers (Mario/Zelda), I don't see that many games that appeal to me.

  • SHACKR

    Posted Dec 16, 2007 5:18 am PT

    Why are the graphics "crap"? So what if they aren't the most powerful, it still has very good graphics, it just depends on how much work the developer puts into them. For example, compare Super Mario Galaxy and a bargain-bin game, you'll see it when people don't put as much effort.

  • SHACKR

    Posted Dec 16, 2007 5:11 am PT

    If they had another Wii factory, they would be selling a huge amount of Wiis

  • x-2tha-z

    Posted Dec 16, 2007 4:51 am PT

    I got a Wii yesterday. It's a great machine. I feel bad for people who're having trouble finding one. It's gonna be worth the wait, if that's any consolation.

  • rockutd

    Posted Dec 16, 2007 4:42 am PT

    HAHA.Just puzzles me as to why there is so much hype surrounding the Wii.Ninetendo should just take advantage of the situation...

  • ftjx

    Posted Dec 16, 2007 2:12 am PT

    "It's staggering," Lin said. "They could easily sell double what they're selling." My words exactly

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