Nintendo's Wii Shortage Is Good Business Strategy

Firm sees benefits of its conservative culture
By Nick McMaster,  Newser Staff
Posted Dec 7, 2007 7:00 PM CST

(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.