Oh no … more Wii shortages …

During the first year, I could understand it. During the second year … maybe it could be true. But the third year? Don’t think so. Nintendo is reporting once more that there will be Wii shortages again during the holiday season.

One thing I’m not a big fan of, is when companies pull strategies like this. Sure, it’s smart to limit supply to increase demand, but it sure as hell is a pretty cheap maneuver to help with their sales. And after the jump I have – at least what I think is – some pretty hurtful evidence that Nintendo is the one behind all this, twirling their Mario-esque mustache.

Example #1: An article posted on October 2, 2008

NEW YORK (Reuters) – Japan’s Nintendo Co Ltd expects to have more of its Wii game consoles available in the U.S. this holiday season, but stopped short of guaranteeing there will be no shortages of the popular device.

There will be a “significant increase from 2007’s levels” in North American supplies of the Wii between October and December, the company said in a statement on Thursday. Supplies of the Nintendo DS handheld device will also be available “in greater abundance” the company said.

“While there’s no way to gauge total demand for our hardware systems, we’re trying to satisfy as many of those players as possible,” said Cammie Dunaway, Nintendo of America’s executive vice president of sales and marketing.

Last year during the holiday season, the device was very hard to find, with many stores quickly selling out shipments that they received each week. (Reuters)

Example #2: An article posted on October 27, 2008

You can tell it is nearly Christmas – perfume adverts are on TV, frost is biting your nose in the morning and Nintendo have announced that they might be short of Wiis again. Or are they?

“We’re producing an unprecedented level of hardware to try to meet demand,” said Nintendo’s Reggie Fils-Aime, “We’re flowing products into stores on a very regular basis. Once you see it on the shelf, you ought to buy it.” (Kotaku)

So what you’re telling me is this … within 20 days Nintendo says that they may meet supply and then they say they won’t meet supply. What exactly changed in October … even before the rush of the holiday season? If anything, it should be backwards. They should have originally said, we’re going to have a shortage and then bump production up so that at the end of October you can say, “Good news! We have Wii’s to sell!”

But instead they decide to go backwards. This is what I like to call Bottleneck production. If you think of a beer bottle, there are hundreds of Wii’s in the bottle, but near the top where the Wii’s would come out the path narrows so not so many are coming out at one time. Well, I guess instead of calling it Bottleneck production I should call it shady production.

When you do the the math, there’s no reason why they can’t bump up production. PS3’s cost Sony about $300 with every console they make, but there are still models available despite how well or poorly they’re selling. The X-Box I think is about $100 cheaper to make than the PS3’s but they’re still meeting demand. Back in 2006 it was reported that Wii’s cost $158 to make (Source). Two years later, I bet they’re even cheaper so they make a profit on each console sold. So there’s no reason why they can’t bump up production.

It’s a marketing ploy – plain and simple … and while marketing people may think it’s genius, gamers think it’s a shady and a cheap way to get people to rush to the store to buy one. And with the Wii already under heavy criticism for it’s alleged abandonment on hardcore gamers, this isn’t going to help the Wii’s attempt to win them back.