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New Nintendo Boss Sticks Head In Sand Over Wii Shortages

By David Richards | Wednesday | 03/10/2007

Nintendo boss Rose Lappin is refusing to return calls over claims that the company is facing massive shortages of the Nintendo Wii console. She has also refused to explain the lack of new games for the Nintendo Wii platform.

Known as being arrogant, Lappin expects media organisations to only follow Nintendo press releases. She refuses to return calls over shortages, the lack of games for the Wii platform or even her own appointment as Managing Director in Australia.  

While Wii has performed reasonably well in early sales it is now starting to lag behind as the PS3 and Xbox 360 get a kick along by price cuts and new sooftware.

Jupiter Research analyst Michael Gartenberg said that if supply of the Wii turns out to be too scarce, consumers might decide that it's time to look at other alternatives and other devices, and that can only bode well for both Microsoft and Sony. 
Other Analysts claim that Nintendo will suffer during the next few months as they have failed to deliver new games for the Nintendo Wii and that third party developers are also lagging behind developments for the Xbox 360 and PS3 and 2 platforms.

The Nintendo Wii is about to celebrate its first birthday, but the shortages that held up profits last year are threatening a repeat performance. That, combined with Microsoft 's Halo 3 validating its hype, could mean a slower peak period for Nintendo.

The Wii early on in its release far and away outsold Sony's PlayStation 3 and Microsoft's Xbox 360, despite the company's inability to manufacture enough consoles to keep up with demand. And now, Nintendo President Reggie Fils-Aime indicated he isn't confident Nintendo can produce enough machines for the holiday rush.

"We have been sold out worldwide since we launched," Fils-Aime was quoted by the San Jose Mercury News as saying. "Every time we put more into the marketplace, we sell more, which says that we are not even close to understanding where the threshold is between supply and demand."

What's Going On?

With a statement like that, you have to wonder what is really going on, said Michael Gartenberg, an analyst at Jupiter Research. A company can certainly discover there is a far greater demand than market researchers anticipated for the launch, he explained, noting that companies can even have supply chain issues for months after a launch, especially with new technologies.

"Here we are nearly a year later and Nintendo is saying it is not going to meet the demand for Wiis," Gartenberg said. "At the end of the day, it's a very fine balance for consumers. They may in many cases hold out and get the device they are looking for. But if supply turns out to be too scarce, consumers may decide that it's time to look at other alternatives and other devices, and that can only bode well for both Microsoft and Sony."

The Halo Phenomenon

What also bodes well, at least for Microsoft, is the blockbuster release of Halo 3. Fils-Aime told the Mercury News that Halo 3's impact on the console battle this holiday season is an open question. "I am fortunate to have a series of (games) that are all going to drive substantial sales for me and are all targeted to different parts of the consumer mix," Fils-Aime said.

Indeed, consumers who opt for the Wii tend to be looking for a more casual gaming experience than the intense shoot-'em-ups Microsoft and Sony offer. The Wii caters to a different market segment than the demographic that stood in line for hours to buy Halo. Still, analysts say there is no doubt that Halo 3 is a console-seller.

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