Nintendo thinks depriving potential customers of the coveted Wii is a sound business decision that will ensure its long-term survival. Sure, you want the Wii now, but your passions are fleeting and unreliable. If you can’t wait for Nintendo’s post-holiday production ramp-up, hit the jump and we’ll tell you how we snagged our Wii.

Already, the persistent shortages have led to speculation by angry consumers that Nintendo was deliberately keeping supplies short to create more hype for the product. Reggie Fils-Aime, the president of Nintendo’s U.S. division, denies this, saying Nintendo simply didn’t anticipate this level of demand for the Wii this holiday season.

“It really is a missed opportunity if we’re not able to satisfy that demand, which is why we’re working so hard with retailers,” he says.

Supply-chain management experts say missed opportunity may still be better than being stuck with excessive supply. Unsold Wiis could create a negative impression that consumers don’t want the product. The consequences are so painful that many companies end up erring on the side of a shortage.

“If you flood the market, it will come back to haunt you,” says Christopher Tang, a professor of supply-chain management at the UCLA Anderson School of Management. Nintendo may be missing opportunities by allowing other people to profit from the shortage by charging premiums, but Mr. Tang says that isn’t entirely a bad thing because it creates hype. “Psychologically, it’s better if the customer is begging for the product,” he says.

An excess supply also angers retailers, who must work harder and offer discounts to get rid of the product. The manufacturer’s financial results also suffer because they are forced to lower prices or take back the products retailers can’t sell.

The delay is only partly Nintendo’s fault: “The Wii contains dozens of parts, which means “one manufacturer can hold the whole darn thing up,” says David Cole, an analyst with industry-research firm DFC Intelligence, based in San Diego.”

Finding a Wii takes time and persistence. If you are in New York, a shipment of Wiis arrives daily at Nintendo’s World Store in Rockefeller Center. After several failed attempts, we walked in on a Tuesday before 10 a.m. and walked out with a Wii. Other retailers usually receive a scheduled shipment of Wiis. It may only be five consoles every three weeks, but by cultivating a relationship with your local store, you can find out when it might be wise to pop in. As a last resort, eBay and Craigslist are overflowing with overpriced consoles.

Nintendo Plays It A Wii Bit Cautious [WSJ]
(Photo: largeprime)

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