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I have never been a huge video gamer but, having run into the Nintendo Wii a few times in the past couple of months, I can see why it is beloved.

But here’s the question: why is the Wii, which was famously scarce before Christmas this year, still so hard to buy?

Paul Kimmelman, a technical architect who has guest-blogged here before, poses this question and walks through some of the various wrinkles:

You guys may be interested in the Nintendo Wii and its serious availability issues. They released this in Nov 2006, and have not been able to supply properly to this day. The national availability runs around 2-5%, with most stores out of them most of the time, and no legit online retailer carrying them at all. This has had two effects: the average price paid has been around 150% to 180% of retail price, with none of that going to retailers or the manufacturer. Only scalpers are profiting. It is interesting to me for 5 reasons:


1. Nintendo clearly made a colossal blunder in setting up their manufacturing. Even if they assumed it would not do very well, their inability to ramp up production in 4 months is pretty unusual in this industry. Note that there are no known parts shortages.


2. Retailers are benefiting in extra store traffic, as people come to check to see if they have it available. So, even if they lose potential sales of this device, they probably make up much more in sales to people who are in the store looking for one. Perhaps the retailers are paying Nintendo not to ship them to the US?


3. Game vendors (including Nintendo) are hurt by this, since their TAM/CAM is held artificially lower. Since shelf life of a game is very much based on release date, this hurts the game developers.


4. It is unclear how much this has pushed sales of XBox360, PS3, PS2, and even older Gamecube devices. Since Wii has a quite different controller design, people are attracted to it. Normally, this would have benefited their competitors a lot according to economic theory.


5. Nintendo has not addressed this issue publicly at all. No apologies, no status reports, nothing to say what they are doing about it. Surprising for a company in this situation. It is unclear if they feel this shortage is a PR advantage or problem.

source

I went to get one yesterday after all the talk about them being in stores for Sunday..

Sure enough, line wrapped around the building at Circuit City and Best Buy. I went to Chili's and drank beer instead.

Oh, and Sam's Club....no dice. They said they hadn't had one in months.

(Fort Lauderdale area)

i agree w/some of this, wonder why nintendo hasnt ever come out and said 'sorry folks we are trying, be patient' or anything

they always talk of being different than sony or MS, but they are just as unresponsive to customer concerns (except for broken wriststraps-natch)

i was kinda hoping this weekend would flodd the market with some wiis

boy was i mistaken

If they flood the market, the publicity will die down. Buzz is created because people are still hearing about it word of mouth or only playing it a few minutes. Sure everyone was bitching about the ps3, but for that short while when they weren't on shelves, people were snatching them up. Then other shipments came out and they sat on shelves. Now that they are widely available, there has been SO MUCH bad PR and I guarantee you it has affected some not so impulsive buyers to take a wait and see approach. Ultimately is this better or worse? Time will tell. But the fact that there are lines 4-5 months after launch and yet the Wii is still the #1 selling console of this gen speaks volumes.

The media and people help this along.
By the time that the wii is avalible in large amounts, it won't be such a problem to get one

Well honestly I feel they are becoming more available now... figures after months of trying to track one down, I get one and a week later every seems to have one! my husband was in Sam's club and they got in 20, EB Games are getting some in this week sometime... walmart, best buy, Toys R Us and Circuit City all had them in on Sunday.

For the first time ever I saw 2 on a store shelf about 2 weeks ago.

I think they are doing the best they can and it was confirmed a couple of weeks back that they were on the look for more manufactures.

I don't agree with any of those points at all. People are looking to much into it. Haven't they ever thought it could just be that Nintendo is already at maximum production and people are just buying the things like mad? Look at the sales numbers for the love of...

In other words, that article was probably another lame attempt at bashing Nintendo or Wii.

I kinda agree with the article, I mean look at the PS3. It has sold half as many units as the Wii, although there are still a ton sitting on shelves, and it most likely takes longer to produce 1 PS3 compared to 1 Wii, but they aren't hard to find at all.

I think people who HAVE Wii's will probably look at the article with skepticism, but for those who DON'T have one will probably find a lot in common with what's being said.

I have a Wii, and love it, but there comes a point where the whole idea of "everyone wants it so bad we can't keep it on store shelves, because they're being bought immediately and we can't produce enough" just doesn't hold water.

I'd like to know how long it actually takes to make a Wii from start to finish.

thank you mr obvious

tee hee

LOl that was funny. nice one luben

Then again, Wii has sold twice as many units. Therefore it would stand to reason that production is going at more or less the same rate for both systems.

I don't think it's anything sinister though, like the article would seem to want you to believe. I feel that Nintendo is producing the systems as fast as they can while not going into "over production."

It's the most basic "supply and demand" principle. The "supply and demand" model predicts that in a competitive free market, price will function to equalize the quantity demanded by consumers and the quantity supplied by producers, resulting in an economic equilibrium. In a free market, the amount of a product supplied by the producer and the amount demanded on the consumer are dependent on the market price of the product. The "law of supply" states that supply is directly proportional to price; the higher the price of the product, the more the producer will supply. The "law of demand" states that demand is inversely proportional to price; the higher the price of the product, the less the consumer will demand. Thus, supply and demand both vary with price.

Nintendo isn't doing anything out of the ordinary with their production. Consumers are just demanding more of the product due mostly to the fact that it's cheap in relation to it's direct competitors. Not to down-play the excellent quality of the console, but face it, most non "fanboy" consumers bought or will buy a Wii because it's the cheapest next-gen console. They will love it afterwards, because it's a great system. Essentially, and I'm guessing here, around 90% of Wii's market is driven by people who didn't really know what the system was before they got it. Once demand starts to level off, people will see more and more Wiis on shelves. But it won't be because Nintendo is producing more.

On the other side of the coin. There are more PS3s sitting on shelves right now, not because there are necessarily more of them in existence, but more because the demand isn't as high. I know that's a pretty obvious point, but what I'm trying to bring to light is that it may seem like Nintendo is failing to meet current demand on purpose (or through neglect), when really they aren't doing anything out of the ordinary in one direction or the other. There are no rules or laws that says that Nintendo has to meet the demand. And really they don't need to, they are already making more money than they had planned on.

And hey, I do sympathize with those of you that haven't been able to get one yet, and are having a hard time finding one. I know what it's like, I couldn't find a DS Lite for like 4 months before I finally got one! Just hang in there and you'll have one before you know it! ^^

Seeing stuff likes this just makes me be thankful that I paid the ridiculous price I did to get it on launch date. I can't imagine not being able to use my Wii for all these months. What if I didn't have a Wii yet? *slaps himself, stop with that crazy talk*

i have to disagree a bit, guys

IMO, if nintendo could wave a magic wand and double (or triple) production so there are twice as many wiis on shelves they definately would,

they want as many units as they can get in the hands of the consumers, it has nothing to do with maintaing 'hype' or 'buzz' that ship has sailed

they just dont want to pay the steep $$ price to fix the short term supply issues that will eventually (maybe in 2008?) level out

You know we have member by that name.