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at 11:04AM PST on October 3, 2007.
RE: Reggie: We won't be able to meet Christmas demand
The Wii is also the lowest tech console and by far the easiest to produce. Demand for all three current consoles will also skyrocket during the holidays. There are ways to predict this, Nintendo probably has a pretty good grasp on the how many they will sell. The very fact that there are systems availble in other regions (and even parts of the US) shows that if they really wanted to they could spread things around and cover more of the shortfall. So, there are a few possibilities here. Either they are planning for the shortages as I stated in my earlier post, they really can't ramp up production any more, which since the console race is really all about adoption rate (games will go were the most console sales are)and the Wii is relatively easy to produce I personally find unlikely. The only other logical conclusion is that Nintendo is simply saying there will be shortages to spur sales. Though if they say this and there are not shortages they risk giving investors the impression that the system is selling less than expected and thus providing even more motivation for an artificial shortage.
This buzz about shortages, or buzz that would develop around actual shortages is VERY good for Nintendo. Current estimates are that they make around $50 on each Wii sold. You can give up say a million Wii sales generate well over 50 million worth of free advertising in the form of news coverage and general buzz, and then provide the systems and make the majority of those sales anyway. The beautiful part for Nintendo is that the alternatives are nearly twice as expensive as the Wii so they are not driving consumers to the other consoles the way that Microsoft or Sony would drive people to the other if their systems sell out. Also there set up is unique enough that even if some consumers buy one of those consoles its doesn't rule out a later Wii purchase.
Loss of immediate sales is bad. However if you create a shortage which generates news articles you full fill Nintendo's strategy of appealing to non gamers. Most people who don't currently game will pretty much ignore a system no matter how well it sells. They don't really pay attention to video game adds, they don't read this site or likely any of the ones we link articles from. However, most of them likely read a news paper, or watch the TV news. Get the word Wii in front of those people, make Wii a word everyone knows even if they would never ever use one much like Ipod, and that is priceless. Worth way more than the loss in sales.
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