Citing historic demand for the Nintendo Wii, Nintendo of America President and Chief Operating Officer Reggie Fils-Aime spoke to reporters Friday (December 14) to explain why holiday shoppers are struggling to find the system on store shelves and what his company will — and won’t — do about it.
“We expected Wii to perform extremely well within the historic launch parameters of the video game industry,” Fils-Aime said. “What we didn’t expect is to write an entirely new chapter in that history and have it happen that fast.” He said the system has sold more than 6 million units in the U.S., and that even though Nintendo is now manufacturing 1.8 million a month, it “has remained a sellout virtually everywhere in America nonstop from the day it launched.”
To alleviate consumer frustration, he said Nintendo and the retailer GameStop are announcing a rain-check program, guaranteeing that consumers who pay the full $249.99 preorder for the system on December 20 or 21 will receive a Wii by the end of January. He said that “many tens of thousands” of the rain checks will be available.
Fils-Aime also said that new systems will be on sale this weekend at “at least six national retailers,” including Kmart, Best Buy, Sears, Target, Toys “R” Us and Circuit City. He added that Wal-Mart “will be pushing out massive amounts of Wii systems into their stores all week long.”
He encouraged consumers not to pay more for the system than the $250 price, but said Nintendo cannot take steps to penalize retailers who mark up the cost other than to withhold extra supply.
Fils-Aime said Nintendo could do no better than they have. “I get personal calls from people wanting to know why we just don’t manufacture more,” he said. “Believe me, if it were that easy, we would.” He blamed production constraints on Nintendo’s dependence on a wide array of suppliers and a simple inability to meet constant consumer demand. “There was no ability for us to stockpile systems over the summer to meet the holiday rush.”
One way to increase that output and the speed with which systems reach American consumers, though, would be to begin manufacturing the machine in the U.S. Currently it is only made in Asia. Asked about this by MTV News, Fils-Aime said, “We have no plans to manufacture the Wii system here in the Americas. It is a complicated system to assemble. There are quite a number of proprietary techniques that we use to protect ourselves in terms of piracy and security, so production will continue to remain in the Far East.” In response to a later question, Fils-Aime declined to say whether Nintendo was beginning to air-ship its consoles instead of shipping them across the Pacific by boat, as is the norm.
Given that Nintendo is manufacturing 1.8 million Wiis a month and that U.S. sales hit 980,000 in November, according to the NPD sales-tracking firm, Nintendo of America appears to be drawing about half of the global supply. MTV News asked if the U.S. might be due an even bigger portion.
“As you know, Japan has no Thanksgiving, same for Europe. So we knew that in order to maximize the selling opportunity that we have here in the U.S., we needed to have a greater share of the production,” Fils-Aime said. “And you are correct. If you simply do the math it would suggest that we receive 50 percent of production for the month. As we look to the future, the decisions that are being made by the executive committee of Nintendo are to put the hardware where it will essentially sell out the fastest. … My role in my job is to continue to share information with them on the strong sales here in the Americas and to argue for a larger and larger share of production, which is what I do every week.”
Fils-Aime could not indicate when Nintendo will begin making even more Wiis — or revert to non-holiday rates — saying there is “no date targeted” for a change.
For now, the Wii remains hot. The 981,000 units sold in the U.S. in November compared to 466,000 PS3s, 496,000 PS2s and 770,000 Xbox 360s, according to NPD.