It’s 2006. Nintendo released a console very few believed in. Suddenly one person tries it out at Best Buy. Three days later, you can’t find it… anywhere. Every shipment arriving at every store is gone before they can get the consoles on store shelves. Wii Sports and Twilight Princess begin to form a powerhouse combination. Nintendo clearly didn’t anticipate such high demand. Rumors start flying Nintendo is holding stock back on purpose to create demand. Whatever the case may be, it was the start of Nintendo’s best selling home console ever.

Except, we now have some evidence that it had nothing to do with demand—Nintendo was losing money on the Wii at launch, and wanted to mitigate the losses by not offering the full stock until the price of the parts dropped.

“Nintendo, for example, supply-constrained the Wii in its launch window; that strategy was not in order to create sales hype, as it was often accused of, but rather because the device was losing money on each unit sold. Had Nintendo fulfilled demand completely, it would have taken a huge operating loss. By waiting, it got to hang on for manufacturing costs to fall before supplying the demand in the market.”

What do you think?

Source: GamesIndustry

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Nathanial Rumphol-Janc
I am the current Editor-in-Chief of Zelda Informer and have been running the show here since July 16th, 2008. I've actually been running Zelda Fan sites since 1998, so I've been in this "industry" for roughly 16 years. I'm 28 years old and have two kids, one biological, the other more of a step daughter (not legally yet, but practically). I live with my girlfriend and our two kids (Aiden, age 1 and half, Melody age 3 and half). I'm attending college to create video games web applications, and I naturally love Nintendo (I run a Zeld a website after all!). For those curious, I currently own a Wii U, Xbox One, 3DS, PlayStation 3, and a gaming PC (and a gaming capable laptop too!). I do plan to eventually get a PlayStation 4, likely when more comes out I am interested in playing on the system. I do play the Wii U more than any other system I own.

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