Thursday, December 06, 2007

The Nintendo Wii - Modern Day Juggernaut

So it's been just over a year now that the Wii has been available to consumers, and yet, unless you are willing to pay-up on EBay, press your luck that you'll randomly get one at Best Buy, or you use Wiitracker.com frantically, it is unlikely that you'll find the console on shelves.

The WSJ had a nice column on the Wii hysteria for this Christmas season. Given the inability for consumers to find the Wii on its shelves, many feel Nintendo may be doing a disservice to itself because they are losing would-be customers and disgruntling many of them, the article notes. However, the article goes on to state that the allure of scarcity value with the product forces consumers to attach a higher value to it (i.e. people want what they can't have), and this helps drive continued traffic and a sense of obsession from consumers. It's sort of a Catch-22 for Nintendo.

Is Nintendo making the right move? It's hard to say, but clearly demand is high enough for the layperson to make a tidy profit. The basic console retails for $249.99 (the Wii Sports package), but a quick search on eBay reveals that this same console is selling for around $340 (plus $40 for shipping).

I dug up an initiation piece by Goldman Sachs on Nintendo that someone had sent me a few weeks ago. The initiation piece is pretty recent (date 10/2/07). Check it out here.

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