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I`m not a gamer, and I don`t buy things like the PlayStation, X-Box, or Nintendo. I have nothing against them, it`s just not my thing. But I`ve been watching, fascinated by the unbelievable insanity surrounding the Wii this year.

What makes it particularly noteworthy is that this isn`t the first year the game station`s been released. If it were, I could understand the company`s projections being off. After all, new item, who knows? But this is the second year, and people have been waiting a large part of last year to get their station.

So what`s the deal? Why is a company the size of Nintendo doing this? Ordinarily, I`d use a standard rule-of-thumb, and follow the money. Is that the bottom line: Are they somehow making money by causing a shortage of an in-demand item? Will they make more than if they sold as many as they could produce at the point of sale?

That doesn`t seem to make much sense, particularly with eBay re-sellers getting twice the suggested retail price.

I have to say I`m stumped. Of course there`s the possibility that the executive management at Nintendo is moronic to the level of having cucumbers for brains. But isn`t that perhaps too easy an answer? After all, we`d have to expect that the CEO and COO are probably in the 6-figure salary range, right? Would the stockholders actually hire vegetable-brain people to run the company?

Anyone have any insights into this? We hear about the "last-minute inventory" scheme, where it`s The Greatest Thing Ever to have only enough inventory to meet customer needs for tomorrow afternoon. Is that what`s causing the issue?

I read this (which means it`s true, right?) that some stores were indeed receiving shipments of Wiis but not putting them on the shelves.  Instead they are taking advantage of the "shortage" and listing them on eBay for over the retail price.  I`m not surprised that would be happening.

But as to WHY the shortage is happening, I don`t know.  I haven`t been following the story close enough to speculate Nintendo`s strategies.  I just thought I would add this interesting tidbit I read.  :)

We have been following the Wii shortage fiasco for a while now. The official party line that we have heard is that Nintendo is an incredibly conservative company (many years ago my Mom used to work for them, but I can`t remember her every saying anything of the sort, not that she would have) and they totally under estimated the holiday demand.

They claim they are not intentionally causing a shortage. The problem, as you may be aware of, with manufacturing electronics is the incredible lead time involved. Nintendo outsources everything (as we understand it) and they are at the mercy of their suppliers and contract manufacturers.

Nintendo did not expect demand to blow up at the end of the year as it did. Otherwise, we are sure that they would have upped production to cash in on the higher demand. They are not directly benefiting from this surge in demand. The retail price is the same as it has always been.

Why wouldn`t they want to sell as many as they could during the holiday season to cash in on the incredible demand?

It just seems to be a gross underestimating of the demand of a 13 month old product. Nintendo didn`t want to make too many and be stuck with warehouses full of them. They just erred a little too far on the side of caution.

On the other hand, we finally got our hands on one. Ordered it from Amazon a couple of days ago, for just retail price, free shipping, etc. We don`t have kids and just want one for ourselves.

The Wii is unlike any other game console on the market in that it does appeal to childless households. This might account for the sudden increased demand.

Just our 5 cents worth...

I`ve heard the rumors of retail stores holding them back, but that seems to be urban legend, for the most part. I`ve also heard about how they underestimated their demand for THIS holiday season, but I just have a hard time believing that.

As I said, I can easily understand the underestimation for last year, when the product was new on the market. But with 12 months of trend data, in one of the largest companies around, to say they "just couldn`t get a handle on demand" for this year`s holiday is, in my own opinion, also leaning toward urban legend or guessing.

I`m reminded of a saying in the systems engineering world that with a high enough complexity, the probability of a breakdown increases. The more complex the system, the easier it is to bring it down. Michael Crighton used this in "Jurassic Park" and it`s been used many places elsewhere.

Another example is the increasing ease by which entire urban road systems become a parking lot during rush-hour if there`s only one or two blockages from crashes. Isaac Asimov wrote a great story back in the 60s about the day when the "grid" become so complex that a coincidental series of accidents shut it down completely for days on end.

I wonder if we`re seeing the very tip of the iceberg here. When you think about the massive overlapping and interlocking systems involved in an emerging global economy, with all the outsourcing and component manufacture, what if this is a symptom of an inherant flaw in the overall idea?

The old butterfly theory, where a butterfly flaps its wings in Japan, and a hurricane takes place in Texas.

Craig, when you put the shutting down of the "grid" and other complex systems with the question of "I wonder if we`re seeing the very tip of the iceberg here?" into this discussion of Wii holiday sales, I can`t help but wonder - Is this the beginning of the collapse of civilization as we know it and is the Wii responsible?  (Nintendo was not available for comment on this matter.)

I`m convinced that entirely because of Nintendo, we`re likely going to see human beings disappear from the face of the Earth in only a short time---probably before global warming can even begin to take effect. Then, with the planet an empty sphere, wandering lonely through the solar system, we`ll be ripe for invasion by extraterrestrials, all of whom will FINALLY find a hYOOOOGE stockpile of Wii games.

They`ll scratch their heads, wondering what this pile of silicon and wire is all about, and at last realize it`s food! From there, evolution will begin again, to create a new species.

This is the truth, as I see it, because it just feels like the truth. Anyone agree?

Great post Craig. My Wife has been asking this question since April when we tried to get one for my son. It took 2 days but we got it.

So these stations are available and shipping, just not on particular days, and not in the quantities wanted for the largest gift-buying period of the year.

It seems Nintendo has decided to stay small, rather than go big. :-) They will ship no Wii until it`s made.

We have been trying to get a Wii since before last Christmas. Once again our children won`t find a Wii under our tree this year.

-------------------------

Thanks and have a blessed day!
Sincerely,
Dennis Thomas, Jr.
President
dennis@AlphaCardServices.net
www.AutomaticResidual.com
www.AlphaCardServices.net
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Alpha Card Services
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See, Dennis is talkin` about the deeper problem---what about the children?

:-)
But yes, I`ve been hearing about customers who`re waiting after an entire year, where they were promised a station and it stil hasn`t been delivered. That`s what`s so weird about this whole thing. There seems to be, on the surface, a lot of money being lost by Nintendo. And I can`t believe a company that size would intentionally continue a practive that`s losing them all that money.

It`s what I meant when I said that I can understand a mistaken estimate of sales LAST year. But 12 months later?