Wii? Non.

Yes, I’ve run out of English-language Nintendo Wii puns and am now reaching into French. But the fact remains that it is now March and the Wii is still incredibly hard to find. The shortage has attracted the attention of Real Economists now. Some of the more interesting consequences:

  • There are no known parts shortages, but Nintendo simply can’t keep up with demand. I remember reading earlier that Nintendo decided to use sea-based shipments to save money rather than air shipments from the manufacturer to market; that surely adds another bottleneck to exacerbate the manufacturing one.
  • Retailers and Nintendo’s competitors actually benefit from the shortages, because walk-ins searching for a Wii end up buying something else.
  • Nintendo is hurt by this, since the units are being scalped for up to double retail pricve, and not a penny of that goes into Nintendo’s pockets. Likewise, game vendors are being hurt because they are sitting on a lot of Wii game titles that people can’t play, so their inventory isn’t moving.

So the bottom line is a weird kind of limbo where Wii unit sales still top the sales of any other new console by a huge margin, since every Wii that makes it to the shelves is snapped up immediately. However, sales of old-generation Playstation 2 have been boosted by the shortage, beating out the Wii’s numbers, because the PS2 is the only thing in a comparable price range that can appeal to the disappointed walk-in. But the true king of the hill is the Nintendo DS which blows every other game system old or new, console or handheld, out of the water. Here are the numbers:

Sales of the new video game systems cooled slightly, according to sales numbers released by NPD for the month of March. Sales of Nintendo DS nearly doubled that of anything else, selling over a half-million units.
The PlayStation 2 demonstrated impressive staying power at second place at 280,000 sold, outselling each of the new consoles. Wii came out on top of the new consoles once again with 259,000 units, well ahead of the Xbox 360 at 199,000. The PlayStation 3 lagged behind both the PSP and the Game Boy Advance at 130,000 units sold.

What to conclude? In a nutshell, people want innovative and accessible games for cheap. The PS3 is innovative but not cheap; the XBox is not that innovative, just evolutionary, and still pricey. The Wii has both at a low price point, and the DS is cheaper still – and judging from the blowout of the DS over the PS2, price matters more than innovation.

I think this kind of sounds the death knell of the old gamer marketing model. The elite gamers who can dish out $600 for the latest console just can’t carry the market anymore. Those consoles actually lose money on every sale, in fact! Expect to see the PS$ and the next iteration of the XBox to reverse course and offer only marginal hardware improvements, and a new “shtick” aimed at capturing away some of the enormous, heretofore unsuspected family gaming market. That’s where the profits and the market share lie. The hard core types still have the PC market, after all. The rest of us are willing to wait two years for a $250 PS3.