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September 5, 2008 11:22:15 PM CDT

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Nintendo's Wii Shortage Is Good Business Strategy

Posted Dec 7, 07 7:00 PM CST in Technology,  Business 

(Newser) – Nintendo’s Wii is proving hard to find in the holiday rush, a phenomenon the Wall Street Journal says is indicative of the Japanese company’s cautious culture—but also good business sense. Nintendo is cautious for a reason: it saw its fortunes rise with the original NES and SNES consoles, only to fall when Sony’s Playstation and Microsoft’s xBox cornered the market.

Nintendo also outsources all production, meaning problems with one of a dozen parts manufacturers can hold up the entire supply chain. Nintendo claims the shortage is unintentional, lamenting “missed opportunities,” but industry analysts say its also advantageous: "If you flood the market, it will come back to haunt you…Psychologically, it's better if the customer is begging for the product,” said one economist.

Source Wall Street Journal

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An employee retrieves games for customers purchasing Wii video game consoles at the Nintendo World store in New York's Rockefeller Center, in this June 21, 2007 file photo. A year after its launch, the...   (Associated Press)
This photo from Nintendo shows the Wii console. Nintendo sold 350,000 Wii consoles during the first week of the holiday shopping season. Despite this success, Nintendo's trademark marketplace caution...   (Associated Press)
Shoppers crowd a Target store Friday Nov. 23, 2007 in Pasadena, Calif. Shoppers _ shrugging off a spate of lead-tainted toy recalls and higher prices for food and gas _ jammed stores before dawn Friday...   (Associated Press)
A Nintendo Wii game console is seen on display in a case at Best Buy in Mountain View, Calif., Tuesday, Nov. 20, 2007. From humble origins over a century ago as a maker of traditional Japanese playing...   (Associated Press)
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eBay  • Nintendo Wii  • video game console  • Nintendo  • Xbox  • shortage  • PlayStation  • game consoles


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