Popular Game System Sees Big Demand

Wii, the hot game system from Nintendo, is in high demand again this holiday season. It has been widely reported that there is a shortage of the game system. But is there really, or is Nintendo playing games with consumers to boost demand?

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MADELEINE BRAND, host:

If some of those Canadian shoppers are crossing the borders to get the Nintendo Wii, they could be sorely disappointed. More than a year after Nintendo launched it, there still aren't enough to go around.

And as Brand Linder reports, that has led to some pretty interesting conspiracy theories.

BRAD LINDER: Ask any video gamer and you'll find out the Nintendo Wii is a must-have. But the game system is almost impossible to find in stores. You can buy it on eBay if you're willing to pay $100 more than its worth, or you can call your local game store every single day to see if it's in stock. Some people have waited a long time to get their hands on a Wii.

Mr. TONY BACHIKALOOPO(ph): I knew that I wanted the system from day one and couldn't get it for Christmas that year, couldn't even get it for my birthday a few months later on.

LINDER: Tony Bachikaloopo was a 24-year-old product manager at a software company in New York.

Mr. BACHIKALOOPO: So it came to April, which was six months-plus after the system had come out and it was still very difficult to get.

LINDER: So Bachikaloopo lined up one April morning outside the Nintendo World Store in New York, an hour and a half before it opened.

Mr. BACHIKALOOPO: And it turned out to be an awful day; it was pouring rain. And so I got completely soaked and was huddling under my umbrella. And despite the heavy rain, there was still a very long line and I wasn't sure if I was going to get one.

LINDER: He did get one.

So what's the big deal with the Wii? It's just a small white box with a funny-looking remote control that runs cartoon-like video games. But there's one thing that makes Wii stand out from the competition - its games are incredibly easy to play because you don't have to learn to use a complicated remote control like you would with other game systems.

(Soundbite of video game)

LINDER: For example, if you're playing a tennis game, you swing the controller like a racket. If you're bowling, you throw your arm like you would with a bowling ball. And right now, Bachikaloopo was throwing all strikes.

Now, are you this good (unintelligible)?

(Soundbite of laughter)

Mr. BACHIKALOOPO: I've found that you're a little bit better at Wii bowling than in real life. But in general people who are good at bowling will be better at Wii bowling than the average person.

LINDER: Bachikaloopo was lucky. New York's Nintendo World store is one of the only places that gets a Wii shipment every day. Outside in New York it's even harder to get a Wii, and that's led some people to come up with conspiracy theories.

Earlier this year, the CEO of a video game store chain claimed Nintendo had artificially created the shortage. And last week a New Jersey man sent a letter to popular Web site The Consumerist claiming sales people at one store were up to something.

Consumerist's senior editor Meghann Marco says the letter writer claimed he had seen clerks at a big box electronic store pretending they were out of Wiis when they weren't.

Ms. MEGHANN MARCO (Senior Editor, The Consumerist): Sort of artificially creating a shortage of Wiis by announcing that this is the last one, this is the last one. And of course he reacted to that very emotionally because there is a sort of perceived shortage of Wiis and they're very popular.

LINDER: Dozens of other Web sites picked up the story and many people questioned whether the whole Nintendo Wii shortage was being faked for publicity reasons.

But Nintendo Vice President of Public Affairs Perrin Kaplan says that just doesn't make any sense.

Ms. PERRIN KAPLAN (Nintendo): I don't know any company that would leave sales on the table, and we aren't leaving sales on the table in terms of this being any kind of manufactured shortage.

LINDER: Kaplan says what really happened is that demand has been far greater than Nintendo expected. The company has ramped up production twice this year, but still doesn't expect to have enough units on the shelves for the holidays.

Michael Pachter is a research analyst with securities firm Wedbush Morgan. He says Nintendo has nothing to gain by holding back distribution.

Mr. MICHAEL PACHTER (Research Analyst): The Wii is a profitable product. But the real profits come from selling people software after they buy the Wii. And so it's in Nintendo's best interest to get a Wii in as many hands as possible, as early as possible. So you know, that's what convinces me that this shortage is real and not manufactured.

LINDER: And Nintendo's competitors stand to benefit from the shortage. At $249, the Wii is much cheaper than Sony's PlayStation 3 or Microsoft's Xbox 360. But as long as Wiis are hard to find, Pachter says parents might be willing to spend the cash on more expensive game systems.

Mr. PACHTER: Because they really do want their kids to, you know, open up the present under the tree. So I think that you'll see some small lift in PS3 and Xbox 360 sales.

LINDER: Both Sony and Microsoft have lowered the prices of their game consoles recently, which is probably a smart move, because Pachter estimates that half a million people or more who want a Wii this holiday season won't be able to get one.

For NPR News, I'm Brad Linder in New York.

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