All About the Wii Shortage

I've been in the market for a Wii ever since school let out. We haven't had a new game system in a while and I wanted one that the whole family could play. I'm not looking for blood and guts games, just wacky, fun ones. When I went out to find what I thought should be an easy-to-find commodity, fully 2 years after it's introduction, I discovered that no one has them. Best Buy, WalMart, Game Stop, Target, Toys R Us, all of them are just getting a trickle of the things. They sell out the day they get a new shipment.

So what happened? How can Nintendo be so far behind in production so long after the introduction of the system? The answer is that they're not behind in production, it's that the fallen dollar has removed most of the profit from selling Wiis in the US.

(T)he analyst, Michael Pachter at Wedbush Morgan, said the real culprit for the Wii shortage in the U.S. is the weak dollar...

With a weak dollar, foreign companies that sell their goods in the U.S. for dollars and then convert those dollars to their native currencies get a smaller profit than if they sell their products in countries with strong currencies of their own (such as Europe with the euro). In other words, Nintendo makes a bigger profit on Wiis sold in Europe than on Wiis sold in the U.S.

So Nintendo, Mr. Pachter said, has been behaving perfectly rationally by sending excess Wii consoles to Europe to satisfy the more profitable consumers there.

Ouch. I discovered I can buy Wiis online if I am willing to pay a $65 premium. I might just do that in the end. In the meantime, we're still unpacking and we haven't yet had the time to play it anyway.