Wii shortage to cost Nintendo $1 billion

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Initially Nintendo could afford to take the Wii shortage lightly, maybe even with some pride, but now things have changed. Nintendo has constantly come up with assurances that it is trying hard to meet demand. However, many analysts believe that these assurances might not work anymore and gamers might flock to buy other consoles. They even expect Nintendo to loose out on roughly $1 billion worth of Wii sales this holiday season.

Failure to meet demand means that Nintendo is missing out on an opportunity of far greater sales than it is currently able to manage.James Din, senior analyst at the MDB Capital Group, told New York Times that the shortage might be depriving Nintendo of double the sales that it can manage righ now. He estimates that Nintendo might miss out on $1 billion of sales this holiday season. While arriving at that figure, he did not take into account the increased sale of first-party software, if Nintendo was to meet demand.

There has been an adverse effect of Nintendo’s failure to meet Wii demand on its stocks, which have dropped by 8% since November. Nintendo is playing into the hands of its rivals and Sony’s CEO Howard Stringer knows that. He took a dig at Nintendo, earlier this week, when he said that he was happy that Wii seemed to be running out of hardware.

Read [New York Times]

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