Several times I’ve recently heard people talk about the high street-price of the Nintendo Wii, and that this might be induced by an artificial scarcity.
Surely this is crazy? Nintendo have no reason to artificially restrict the supply of Wii. Remember, the factory gate price doesn’t change; Nintendo get exactly the same amount of money for each Wii sold, whether the retailer sells it at USD 300 or USD 600. So it’s clearly in Nintendo’s interest to sell as many Wii as possible. This is not a luxury Rolls-Royce, they do not make only 1000 and then sell each one for USD 10,000.
I can see that over the course of a year Nintendo might want to restrict supply at some times so they can supply demand at others; I’m sure that over the summer Nintendo have been restricting supplies of Wii so that they create a stockpile for the holiday season. But that season is upon us, surely Nintendo are pumping these little puppies out as fast as they can manage?
There are reasons why it’s bad for Nintendo to be unable to supply demand for Wii (whether deliberately or unintentionally): pushing up the street price means that you’ll have less money to spend on software, so less money overall going to Nintendo; less chance of getting that coveted “most popular toy this Christmas” spot.
So… why is it so hard to get hold of a Wii? There’s nothing inside the box that seems particular difficult to manufacturer (no high-density optical drives, nor high-volume solid state memory, nor touch-sensitive colour display); the Wii’s been out for a while now so yields ought to be good and the manufacturing process overall should be well understood and easily replicated. Why aren’t they just booting up factories all over Asia making Wii? It could be that they simply don’t have the purchasing power to buy the factory time. Maybe that funny fruit music toy company is buying it all up.