Wii: victim of its own success?

14-12-2007

by Emmet Ryan

Nintendo looks set to miss out on a sales bonanza this Christmas and open up the door for its rivals as demand for its Wii console far outstrips supply.

The times may be a'changing. In the run-up to Christmas 2006 Sony was at crisis point as it was unable to get its Playstation 3 (PS3) games console out to most of the global marketplace, with only a limited amount available in the US. The result saw Microsoft and Nintendo romp home with strong sales for both the Xbox 360 and the then newly launched Wii. The latter console built on this momentum into 2007 while Sony floundered, but now the tide may be turning as the Wii becomes a victim of its own success.

The phenomenal popularity of the Wii has resulted in a global shortage in the run-up to the lucrative Christmas shopping season. Irish consumers are feeling the pinch as much as anywhere else. "The demand has been phenomenal. This is my 15th Christmas [in sales] and I've never seen anything like it; the only thing I could compare it to is the craze over Cabbage Patch dolls in the 1980s," said Michael Finucane, commercial director of retail outlet Gamestop. "We've worked our socks off with Nintendo and we are flying in stock every couple of days. There will be some more deliveries before Christmas."

Finucane said retailers could not have foreseen the level of demand for the Nintendo console. "We all knew it was going to be popular but we never imagined it would be on this scale," he said.

With so few Wiis on the shelves, Nintendo's rivals are reaping the benefits. "There has been a huge increase in demand for video games in general. The PS3 and Xbox 360 have enjoyed massive growth in recent weeks," said Finucane. "The Xbox 360 has been very popular while the PS3 has really taken off recently."

This is hardly a good time for Nintendo to be presenting opportunities to its rivals. Analyst firm MDB Capital recently told the New York Times that the console maker could end up leaving EUR888 million on the table if it fails to capitalise on the Wii's popularity, leaving Sony and Microsoft more than willing to pick up Nintendo's leftovers this Christmas.

After a very slow start Sony's flagship product is suddenly back in the game when it looked destined to remain mired in mediocrity. A change in the marketing and pricing of the product saw it outsell the Wii in Japan in November, the first time it has beaten the Wii on Nintendo's home turf since the consoles were launched. With the playing field evening out the console war looks set to heat up all over again come 2008.