I am not sure about why the Wii has shortages in certain parts of the world. What I can say is that in Ontario Canada it is not hard to find one. Most stores have Wii's in stock at least for the majority of the week. I think that the Wii is getting close to market saturation in certain areas.

It is about time someone shed some light on this touchy subject. There aren't many reporters on the gaming beat that would dare to address this but many already know what you've reported here. Pachter is wrong, as usual. Wii wasn't priced incorrectly. Wii was, and is, priced right. Any higher and consumers wouldn't have bought the damn thing. Wii is last-gen and simply cannot compete with the likes of 360 or PS3. The software attach rate speaks for itself. Come early 2009, I think Nintendo's fears will start to be realized. For now, Wii offers some okay gaming and great retro titles through Wii Virtual Console. Nintendo's swimming in cash and always has. It's never lost money on any hardware, even the Gamecube, so it won't really matter once sales slow, PS3 starts building that library and stealing share from both Wii and 360. Nintendo will once again be left to focus on its real bread and butter, the portable category, which is where it made most of its money back in the GBA days and will continue to do so throughout the lifecycle of Nintendo DS.

It is naive to think that this is a supply chain issue, since this is going on for two years now. It is a deliberate attempt to control the demand and supply so that the price can remain that high.

Comparing Wii to PS3/xBox is like comparing a mini cooper to a Ferrari. Yes, they are both transportation, but the ride is different.

The Wii is fun for reasons other than excellent graphics, powerful processing, rendering and complex role playing games.

In the real world the Wii was just played last night buy four humans aged 8, 12, 48 and 79 - at the same time on the same game. All of them had a great experience. We also have an xBox but would never have that common playing experience.

Wii also brings physical activity to the game console in a way Sony and MSFT have not. It is a engaging and invigorating.

Regarding cost...
Console price: spot on.
Console accy's: just short of unaffordable.
Software ad-ons: @$50 avg. barely affordable. Lower price would encourage more purchases - this is the long term upside available to Nintendo.

Now about shortages.
I wonder if Sony or MSFT had the pleasure of shipping nearly 3 times as many consoles if they could do it with ease?
Nintendo has chosen to not add additional mfg capacity only to shut down the lines later. They use this to their advantage to create a pent-up demand. It is common in sales to use scarcity to drive up demand. It has worked well for them and I bet they use it right through the Christmas 2008 Holiday.

So is Nintendo crazy for not filling demand faster, pricing it higher and using old generation technology? Yes, Crazy like a Fox.

Shortages? Bad supply chain management? Not likely. The Japanese know exactly what they're doing. The key, I think, is to follow the money. If you look at the value of the US dollar versus the rest of the world, you may understand why it makes more sense for Nintendo to sell into markets OTHER than the US. Revenues are higher. If/when the US $ gains strength, the number of Wii units may just magically increase as well.

This analysis only considers the revenue to Nintendo based on consoles. The more consoles that are sold allow more games to be sold for which the profit margin is much high. This supports the argument that Nintendo should be producing Wii's as quickly as possible.

The original shortages were due to a supply of a key advanced component. As the article says, the demand was much higher than expected, and the supplier did not have enough physical capacity (semiconductor production) to expand to meet actual demand. As others have said, such situations are not unique to Nintendo (or to electronics).

The article does a good job, though, of showing why that can't be the full explanation today. After 2 years, capacity to make just about anything can be increased. And differential shortages in different parts of the world show that Nintendo is doing some allocation by region, with the US getting a lower allocation (relative to demand).

The business model for game consoles is "razor blades" ie sell the fixed unit at a low price in order to sell more games. So stockouts in the US are costly to Nintendo. One other observation is that it's impossible even for Nintendo to know how severe the stockouts are - how much would they have sold if the product were ubiquitous. But the lost opportunity is clearly $billions of revenue each year. (5 million units x $200 wholesale price = $1B, plus associated games)

If Nintendo operates in a similar mode to other Japanese companies I've worked with, you may be missing another factor. Many Japanese companies create a business plan way in advance of actual production and from the point the plan's numbers are accepted, those numbers become the overriding control factor. If you are exceeding your business plan number, you slow down shipping and production. If you are behind, you push product out the door. It is very important for an executive to have accurately predicted numbers for a business plan... it makes or breaks careers.

My family has wanted one for over a year, we would not buy any other game console. We only want to play interactive/physical games with our 6 and 10 year-old girls. We cannot be the only ones in this position. We can wait for the Dollar to rise/new President.

Shortages are certainly costly to Nintendo.
I would happily buy many hundreds of dollars (maybe into a thou or two) for games and accessories for a Wii. But it is into 09 already and there is not one to be found anywhere except for pricey online retailers.
The more I have to spend on the console the less there is for games.
But the there IS a supply game. Why do online retailers boast plenty of stock but the local stores only get a few at a time?
The wiis are out there - just not where the average joe can get one.
Nintendo - I hope you are listening.
You are not just missing out on "some" sales. You are severely hurting brand loyalty.
That will hurt business well into the future.
Don't just appologize to your fans - do something about the shortage.