Like I said, I stood in line on Black-Friday and the people that were camped out the longest in line were after, you guessed it, Nintendo’s Wii. Man am I glad I got one last year.
Brace yourself for another cranky Christmas, when hopeful children get up early only to discover there’s no Wii under the tree.
The Nintendo console’s broad appeal — and a maxed-out supply chain that can’t be ramped up to meet holiday demands — is making it almost impossible to snag a Wii at normal retail outlets. With eBay scalpers selling them for hundreds of dollars over the console’s $250 list price, it’s easy to envision fistfights in store aisles as desperate shoppers compete for the few units on the shelves.
“I’ve never seen anything like this,” says Michael Pachter, a videogame industry analyst with Wedbush Morgan Securities, about the overwhelming demand for Wiis. “Nintendo could not have expected this level of popularity.”
So, why doesn’t Nintendo just make more and cash in?
It’s not that the company isn’t trying. It’s bumped up production from about 1 million to 1.8 million a month, says Nintendo Senior Vice President George Harrison, with roughly a third of them earmarked for North America. Last week was Nintendo’s best since the Wii’s launch, with 350,000 sold in the United States alone. In comparison, Microsoft sold about that many Xbox 360s last month. It’s a remarkable triumph for a console focused on the kind of simple games skeptics originally wrote off as “thumb candy for dummies.”
Since its launch a year ago, Nintendo’s diminutive console has been perpetually sold out in North American stores. By the time you see Wiis advertised in the Sunday paper, they’re already gone. Yet the company insists it’s not creating artificial shortages, instead saying that demand — from gamers young and old, and from eBay sellers looking to earn quick profits — keeps increasing.
“Although we’ve made efforts over the year to increase the monthly production rate, we haven’t been able to catch up with demand,” admits Harrison.
The shortage stems from this unprecedented demand, and from the fact that Nintendo had to make its final production decisions for the holidays early this year, Harrison says. The company planned on being able to stockpile Wiis through the summer, when demand for videogames typically slackens.
But Wii, Nintendo has since found out, isn’t like any other videogame system. Unceasing demand throughout the year has thrown the game industry veterans for a loop, disrupting what had been a “very seasonal business.”
“Typically, we’d have begun stockpiling console hardware back in August” for the holiday season, Harrison says. “But this year, we were selling all the Wii we could get, and we got all the way through the summer with basically no inventory in our warehouse.”
Demand for Wii is so high, says analyst Pachter, because of all the different types of consumers competing for the units.
“Wii is the must-have gift for anyone with a kid between five and ten years old,” he says. But it’s not just kids who crave Wii. Grown-ups also want to get their hands on the console, which uses a motion-sensing controller to make gameplay much more realistic than standard joysticks, so they can play Wii’s tennis and bowling games. (The latter is an especially big hit at retirement homes.)
Hard-core gamers, who initially spurned the Wii’s lower graphic power compared to the Xbox and PlayStation 3, have changed their tune on the console, thanks to brilliant software like the first-person shooter Metroid Prime 3.
And eBay scalpers? They really want Wii. EBay currently lists more than 8,000 auctions for brand-new Wii systems, which sell for between $400 and $600 each. On Wednesday, you could find the auctions easily by clicking the giant picture of a Wii on eBay’s front page.
Ultimately, Wii production numbers — and the United States’ allocation of consoles — are determined by Nintendo’s home office in Kyoto, Japan. Harrison says the company will continue producing 1.8 million Wiis every month until demand subsides.
That should happen next spring. But with many high-profile game releases coming after Christmas, like Super Smash Bros. Brawl and Mario Kart, Wiis could be hard to find well into 2008.
And if you want to put a Wii under the tree, without going to one of those eBay scalpers? “It’s going to take some luck,” says Harrison, who notes that retailers sometimes hold Wiis off store shelves until Sunday mornings, when the advertisements go out in the paper.
