Megan asks a question that I can actually answer!
I am very interested to know why Nintendo ramps up these launches so slowly. The Wii has been an astoundingly successful product, but it took over a year for them to get enough to market to get the standard price down to the MSRP. Now the Fit seems to be following the same trend. I would have thought that this was exactly the sort of thing they were trying to avoid–making women feel as if they were running after a children’s toy. On the other hand, if it’s selling at $172, I guess it’s hard to argue with success.
The following comes with the caveat that it’s wisdom received via the collective gaming press, which is perhaps the most craven, despicable quasi-journalistic industry on Earth that is not peripherally culpable for deaths in Iraq (well, unless you count their coverage of America’s Army).
Commenter rlgordonma suggests: “The chips in these units, silly as it seems, are made with the latest and greatest (or next-latest and greatest) 65 nm process.” This affects other consoles, but not the Wii, which uses a conservative chipset that’s generally estimated to have about twice the oomph of the Gamecube console that preceded it. In the gaming industry, that’s not much of an increase.
There are two factors that definitely affect the supply of Wiis and Wii peripherals, and perhaps a third.
The first, most obvious factor is the Wii’s popularity. There’s no question any longer: Nintendo has won this generation of the console wars in a way that nobody anticipated. Cruise ship fleets and retirement homes are buying them; Sony and Microsoft are both readying Wiimote clones. Nintendo’s attempt to open an entirely new market for gaming is working better than anyone anticipated. That effect shouldn’t be underestimated.
But now, twenty months later, why is Nintendo still unable to respond to this demand? The answer may lie with the second factor: Nintendo’s business philosophy. The company is the only game manufacturer unwilling to take a loss on a console — they never have, and, as far as anyone can tell, they never will. Microsoft and Sony both subsidize the price of their boxes in an effort to capture marketshare then make it up on game, service and accessory sales — the exact amount varies as the supply chain shifts and refines, but at times analysts have estimated that the console subsidy is as high as $100/unit. This makes some sense: Sony and Microsoft share a lot of the same titles, and are both competing to have the best graphics in the industry. Becoming the dominant high-end player is important enough to merit a large up-front investment. Nintendo has more exclusive titles, targets a younger audience and has excused itself from the graphics arms race. But a side effect is that the rate at which Nintendo can make Wiis may be constrained by its unwillingness to lose money on each unit.
Finally, the third effect, though speculative, may be real: a lot of folks think Nintendo has limited the scale of their supply chain in order to create scarcity and media attention. Nintendo denies this; I’m not sure what to think about it. It certainly is a bit hard to believe that supplying Wii Fit’s DVD and block of plastic poses the same challenges that the initial console rollout did.