Have you been trying to get your hands on a Nintendo Wii only to be met with empty store shelves? You're not alone, and now we may know why. We live in a supply and demand world...when supply is high and demand is low, prices drop. When things are reversed we see $10,000.00 PS3's on Ebay.
That's why it's hardly a surprise to hear R. Richard Fontaine, CEO of GameStop, saying that his company's profits may be about to ride the crest of "a cycle on steroids."
Fontaine believes Nintendo is about to release the floodgates on the Wii supply drought -- a drought GameStop feels may be the result of a well played Nintendo supply-and-demand strategy. Gamasutra has an article up at the moment in which a few statements made by Fontaine and other GameStop executives are quoted, directly following an investor-level financial reports conference.
GameStop's COO Dan DeMatteo also made the following statement to the press: "I believe that next week we get our first allocations of Wii and DSs and we are quite pleased with those numbers. We were concerned about the dryness here in March, but it looks like April is going to be good. [...] I don't think [more shortages] are going to be an issue...and this just my opinion, but I think [Nintendo] intentionally dried up supply because they made their numbers for the year. The new year starts April 1, and I think we're going to see supply flowing."
This is good news if you're looking to get a Wii next month, but is it good for the industry as a whole? These kinds of strategies can cause distrust and sometimes result in lost customer loyalty. If these reports are true Nintendo is walking a fine line between smart economics and poor public relations.
Do you think it's okay for Nintendo to intentionally hold back consoles just to make their fiscal year look better?
As far as I know, that practice is illegal in the states at least.
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