Nintendo: a Wii shortage for the holidays


Shortages of the ultra-popular Nintendo Wii game console may do what Microsoft (NASDAQ: MSFT) Xbox 360 and Sony (NYSE: SNE) PS3 have not been able to do in the competitive marketplace. They may give the two companies trying to catch the Wii a leg up for the holidays. Nintendo "said it cannot keep up with demand and that U.S. consumers should expect shortages this holiday season," according to The New York Post. The paper adds that "just last month the Wii became the best-selling console over Microsoft's popular XBox 360 and Sony's ailing PlayStation 3, pulling a virtual hat trick by making the Wii the must-have device in North America, Europe and Japan."

The news is bad for Nintendo shareholders by good for Microsoft and Sony. Microsoft has just launched is popular "Halo 3" game which has already hit sales of over $300 million. Early evidence shows that the game has helped double Xbox 360 sales in the early going. Sony has just dropped the price on the PS3 in Europe, and the industry believes that it will follow suit in the US.

Nintendo may have fallen into one of the great traps in consumer electronics--underestimating the popularity of its own product. If so, it is a major gaffe for the Japanese company. It is hard to imagine Apple (NASDAQ: AAPL) running low on iPods, iPhones, or Macs. But, then again, it may be better run than Nintendo is.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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