Monday, December 03, 2007

Nintendo shortage Wii-lly hurts company

Posted Dec 03 2007, 08:13 AM by Kim Peterson

I was shopping at a Best Buy in San Jose yesterday and snapped this picture: Stacks of PlayStation 3 and Xbox 360 consoles. When I asked where the Wiis were, a saleswoman gave a small snort and shook her head. The store was out.

It's a common scenario across the country, and in other parts of the world. A year after its release, the console that many expected would be in third place has become a hit of such proportions that people still line up overnight to buy one. I've had a Wii since its launch, and spent a good chunk of the weekend playing "Super Mario Galaxy." This console definitely holds up over time.

Wii mania is in full swing right now, with the system selling for $400 or $500 on eBay. And while it's great to be making the must-have gift this year, Nintendo execs are rightfully bemoaning the missed opportunities the shortage is creating.

Nintendo of America president Reggie Fils-Aime recently said the high demand is keeping the company from its goal of selling the Wii to non-traditional gamers, such as women and 40- and 50-year olds who aren't video game fans.

"They aren't going to sleep outside of a store overnight or visit a retailer five or six times," he said. "It is literally a missed opportunity."

Fils-Aime was more critical in another interview: "A shortage benefits no one," he said. "We're disappointed. This was all about how we didn't accurately estimate demand. We need to be more bullish about the potential for the Wii."

So there it is. Nintendo didn't have enough faith in its own system, and is paying the price this holiday. The company is cranking out 1.8 million consoles per month and says it simply can't produce any faster. CEO Satoru Iwata has said that one bottleneck after another keeps popping up on the production line, and that slows everything down.

It's a huge misstep, with Microsoft and Sony happy to provide an alternative for frustrated parents who can't find a Wii. Sony CEO Howard Stringer is practically gloating these days. "It's a little fortuitous that the Wii is running out of hardware," he said recently.

If Nintendo is helping competitors sell consoles, something is seriously out of whack. Fils-Aime is right to be disappointed. The Wii is on a lot of Christmas lists, but this is not a holiday Nintendo should be proud of.

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