Nintendo's Story

December 2007 was by far the best month for Nintendo Wii sales since the system launched in November 2006. Year-on-year, its system sales were up 124% from last December and up 37.6% from the previous month. Were Nintendo able to supply more systems to retailers, its sales would likely scale even higher.

After Microsoft's hardware difficulties and Sony's sales slump, Nintendo's problem – a shortage of Wii hardware in the face of overwhelming demand – hardly seems like a problem at all. In November 2007, Nintendo of America's Senior Vice President of Marketing, George Harrison, revealed in an interview with Next-Gen.biz that the company was producing 1.8 million Wii systems per month. Given that constraint, it is impressive that Nintendo sold over 1.3 million systems in the United States during December 2007.

One does wonder whether Nintendo has been stockpiling Wiis for the holiday season. Just in November, Nintendo's sales were well over 50% of what it claimed it was able to produce in a month. If we assume production of 1.8 million Wii systems in a 4-week month, then Nintendo could produce around 2.25 million systems in a a five-week month like December 2007. Under those assumptions, American sales in December still accounted for 60% of Nintendo's claimed production.




Moreover, Media Create reported sales of over 670,000 Wii systems in Japan during four weeks in December 2007. Combined with the figure we have for the United States, that leaves 200,000 systems for all of Europe, a figure that seems too small to be reasonable. One might conclude that Nintendo sold more systems in December than it claims it could produce. Those extra Wii systems had to come from somewhere – from Nintendo or perhaps from retailers wishing to pull in shoppers during the holiday season. This isn't definitive proof, certainly, but it is interesting.

Regardless, Nintendo is in an enviable position. Two holiday seasons have come and passed and their system is still sold out. Demand will eventually drop – this much we know – but the real issues are when and in what manner will it drop.