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Nintendo says that not everyone will be able to find a Wii

Even a year after launch, the Nintendo Wii still remains a hot item that rarely ever stays in retail stock –and comments from Nintendo of America president Reggie Fils-Aime indicate that demand will once again outstrip supply this holiday season.

“We have been sold out worldwide since we launched,” said Fils-Aime to the Mercury News. “Every time we put more into the marketplace, we sell more, which says that we are not even close to understanding where the threshold is between supply and demand.”

Fils-Aime adds that Nintendo is doing everything it can to meet the demand for Wii, and that “The issue is not a lack of production.”

“The issue is we went in with a curve that was aggressive, but the demand has been substantially more than that. And the ability to ramp up production and to sustain it is not a switch that you flick on. We're working very hard to make sure that consumers are satisfied this holiday, but I can't guarantee that we're going to meet demand. As a matter of fact, I can tell you on the record we won't,” said Fils-Aime.

In a previous story, the Nintendo president said that holiday supplies of the Wii will be “substantially more than the launch, substantially more than has been seen to date ... given the level of demand and given the fact that the more we put in, the more we sell, it is still going to be difficult to get your hands on the Wii.” 

Since launch, the Wii has topped the sales charts. NPD sales data from August showed the Wii selling 403,600 units, while the Xbox 360 sold 276,000 and the PS3 130,600. The Wii also became the fastest selling console in history in the UK, and according to several sources, Nintendo’s latest machine is now the worldwide leader for the generation.

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RE: Industry's understanding of Wii is flawed
By Martimus on 10/1/2007 4:23:09 PM , Rating: 2
Warehousing costs are also benificial when you don't meet demand. But I would say that he is right, once you increase production, it isn't easy to back it off later. Add an additional shift to the factory, and eventually you will need to stop that shift when demand dies off, and that is a bunch of severance pay for layed off workers. Not to mention the extra maintenance costs, and other operational costs from adding extra shifts. Nintendo probably didn't expect demand to be so high for so long to justify those additional costs.

By SigmaHyperion on 10/1/2007 4:28:49 PM , Rating: 3
FWIW, Nintendo was set to increase production back in June. It had the contractors lined up and the works. Then there was a big shortage of chips from Taiwan (that's affected a lot of companies) that delayed the plans.

RE: Industry's understanding of Wii is flawed
By T3raYon on 10/1/07, Rating: 0
By Phynaz on 10/1/2007 7:51:31 PM , Rating: 4
You are obviously not working in an industry where fab capacity must be booked 6 - 12 months ahead of time.

By StillPimpin on 10/2/2007 10:23:40 AM , Rating: 2
I think we are a little confused. While the Wii, 360 and PS3 are "computers", they do not play in the IT industry. They are "Consumer Electronics." CE's which have a much longer life cycle than others. 5+ years as opposed to 6-12 months.

Now I don't know much about manufacturing but I don't believe that Nintendo is artificially keeping supply low to keep demand high. That is a risky game that I don't believe Nintendo willing to play right now.

I do believe however that they have not been releasing as much quantity into the market place as they could have because they have forecasted demand to be much higher this holiday season, and so they have held a little back to meet demand for that time, while still trying to satisfy current demand. In other words, they are playing it safe, which I believe is the right thing to do. I for one am going to get one for my family this holiday season if I can get my hand on one. If not, it might not be until September that I even consider getting one again.

And I believe this is where I believe Nintendo is planning on making its hay. Try to meet demand this holiday and if they can't, ramp production a little and release as much product as you can until you reach demand. That way they can increase production to meet demand without committing too many resources that they one day will not need.

RE: Industry's understanding of Wii is flawed
By Locutus465 on 10/2/2007 12:33:33 AM , Rating: 2
Fortunetly these products are made in the Orient (if not Japan then China) where Unions aren't quite what they are here (if they exist)... I'm sure there is some sort of severance package, but I'm sure it doesn't compare to what a UAW work shift would get.

By Murst on 10/2/2007 10:15:08 AM , Rating: 1
Of course they have severance packages. For example, if you leave quietly, we'll give you your last paycheck, and we won't convince the other factory in town (who is ran by this factory owner's brother-in-law) to fire your wife as well.

"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

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