WiiNintendo

Nintendo will not get an estimated $1.3 billion (£639 million) in sales this Christmas by failing to meet global demand for Wii.

James Lin, an analyst at MDB Capital, which monitors retail activity, said Nintendo could sell twice the 1.8 million Wii consoles that it is manufacturing each month. “There are as many people who want a Wii but end up walking away empty-handed as there are who get one,” he said.

Production has been hit by shortages of components, though Nintendo insists it is doing all it can to meet demand. Some analysts believe, that the company more then welcomes tight supplies because it wants to delay market saturation to prolong interest in the console.

Consumers also have their suspicions. A proliferation of online conspiracy theories recently forced Reggie Fils-Aime, president of Nintendo’s American operation, to reject accusations of a “secret plan to store Wiis in a warehouse to spur demand”.

Mr Lin said: “It’s a difficult balance, but at this stage, shortages are not the worst thing”. The Wii is 12 months into its expected lifespan of between four and six years.

Nintendo has raised production targets several times in recent months and now plans to ship 17.5 million units globally this year, up from 14 million. It says that demand “has been higher than we could ever have anticipated”.

Piers Harding-Rolls, an analyst for Screen Digest, the market research firm, said: “There has probably been a certain amount of supply chain mismanagement. But Nintendo could not have predicted the level of demand.”

He added that the shortages are also “a function of Nintendo’s ‘just-in-time’ supply chain, which keeps inventories down to a minimum and is proving hugely profitable”.

Nintendo has this year sold twice as many Wiis as the rival PlayStation 3 by Sony and the Xbox 360 by Microsoft. Stockmarket investors appear to believe that Nintendo can maintain its success. Over the past two years the group’s shares have risen fivefold to make the company Japan’s third most valuable quoted business.

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