December 14th, 2007, 19:55 Posted By: Shrygue
A number of analysts suggest that Nintendo's inability to meet Wii demand is set to cost the platform holder in excess of $1 billion [Ł495.66m] this holiday, while Nintendo's marketing VP admits supply shortages are a "worry".
It's no secret that Nintendo is failing to adequately stock retail channels with enough Wii units despite pumping out 1.8 million systems on a monthly basis, but as the New York Times reports, shortages mean Nintendo is set to lose more than just face.
While Nintendo's Wii has been the bestselling home console in the US every month this year, except during September when a Halo 3-driven Xbox 360 narrowly edged it out, the Kyoto-based company is failing to fully capitalize on the system's popularity.
Nintendo sold 981,000 Wii units in the US during November according to the NPD Group, but according to James Lin, senior analyst at the MDB Capital Group in Santa Monica, Calif., "they could easily sell double what they're selling." Along with other industry analysts and retailers, Lin believes Nintendo could be set to lose out on more than $1billion this holiday, not including missed revenue opportunies from associated software sales that won't materialize.
While Nintendo of America's senior vice president of marketing says he doesn't believe Nintendo's "made any mistakes" when it comes to gauging demand, he admits consumers may turn their heads towards other systems if they can't get hold of a Wii.
"We do worry about not satisfying consumers and that they will drift to a competitor's system," George Harrison said.
Sony CEO Howard Stringer is one interested observer who's pleased with the Wii shortages. "I'm happy that the Wii seems to be running out of hardware," he noted earlier this week. During November Sony's PS3 outsold the Wii in Japan over a four week period for the first time since the systems launched late last year.
As previously reported, Nintendo shares have dropped by eight percent since November, having risen five-fold during the two years prior. Wii shortages and a resurgent PS3 are two factors that leave the immediate future of Nintendo's stock hanging in the balance.
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