Iwata: Wii have a supply problem

Nintendo president Satoru Iwata says game giant is addressing hardware-shortage issues, promises improvement soon.

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Nintendo's CEO and president, Satoru Iwata, has answered a number of questions in a financial results briefing on the company's Web site, including addressing the Wii shortage and mobile gaming, and hitting back at those who believe that the Wii and DS are not as high-tech as competitors such as the PlayStation 3 or Xbox 360.

The Nintendo president admitted that Wii shortages were an issue, and he apologised for them by saying simply, "We are sorry that we were unable to sufficiently forecast this kind of demand." Iwata added that the original plan had been to sell the Wii through a variety of retail outlets alongside video game stores to reach a greater market penetration, although currently this is now off the table. The reason for this is, according to Iwata, "[We] have to supply enough to meet the demands from our existing customers, before we try to expand to new outlets."

One of the reasons for the supply chain problems have been production bottlenecks in the process. "Making a significant volume of the high-tech hardware, and making an additional volume, is not an easy task at all," commented Iwata. "In fact, when we clear one bottleneck for a production increase, we will face another one."

To deal with the Wii's supply-chain issues, Iwata said the Mario Factory is increasing production of the console and a "small increase" is expected in retail outlets starting from this month.

Iwata also slammed criticism of the Wii and DS from those who had said they are not truly next-gen. "While we are on this subject, it looks like some people are misunderstanding that Nintendo is not incorporating state-of-the-art technologies into its products," rebutted the executive. "Just as an example, we are using state-of-the-art technologies to realize the compact-sized Wii console with low power consumption."

Iwata also added that more premium content would be coming to the Wii Channel network in the wake of the successful Virtual Console, where classic games from past Nintendo platforms can be downloaded on the Wii. "When Nintendo thinks we have a channel which is worth asking our customers to pay for, we are in a position to make a business out of it," he said. "I am not saying that the existing services that we are offering for free of charge today will suddenly become a paid service."

Iwata also denied the possibility of expanding Nintendo's software into the similar market of mobile phone users or that the mobile phone market was a threat to the DS. He said that although there were some 90 million mobile phone users in Japan, these cell phones worked across a variety of different architectures, which required different game software for each. The 20 million-odd worldwide DS owners might be much smaller than the international mobile-phone customer base, but the former has a unified software platform.

"I understand many people have been predicting that mobile phones would eat up the portable game machine business in the future, since more than five years ago," Iwata bemused. "If their predictions were right, we would not have today's situation. ... In the case of the DS, when there are 16.5 million DS hardware units in Japan, software can become a million-seller if just one out of 16.5 hardware owners have purchased the software."

Iwata was also asked if Nintendo might hire Ken Kutaragi, Sony Computer Entertainment's ex-chairman and CEO, in light of his stepping down last week to "pursue other projects." "I don't think we will do that," Iwata said.

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