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Struggling US Dollar Affects Wii Fit Release

For those who were unable to snag a Wii Fit on launch day, might have awhile to wait before finding one. In an article released by the L.A Times, some insight is given behind the shortage of US Wii Fit stock.

The lack of Wii Fits in the US, can be summed up by two important factors (if you’re to believe the analysts). The first problem is simply the amount of Wii Fits that Nintendo decided to make for its’ first wave. Analysts believe that Nintendo is wary of releasing an exorbitant amount of the balance board game, due to the problems it had with the Nintendo Gamecube. While I can understand not wanting to create a supply greater than the demand, Nintendo had to know that Wii Fit was going to be the “it” item to have. I’m not sure if I agree with the analysts on this one. Of course I’m just a lowly gamer, while those guys have all kinds of experience in Wall street, and business in general.

The other aspect of the shortage sounds more believable than the first. The US economy has been struggling for the past few months. We’ve seen food and gas prices rise as the dollar has lost its’ power. The euro has actually become more valuable than the dollar, and for this reason accounts for some of the shortage. It’s been estimated that Europe received over 2 million Wii Fit units, while America only received 500,000.

Here is a quote from Michael Pachter, a professional analyst, “The shortage demonstrates one consequence of the weak dollar. We’re seeing companies ignore their largest market simply because they can make a greater profit elsewhere”

When it comes down to any business, it’s all about maximizing your profit. I don’t blame Nintendo for increasing units to Europe, nor do I hold any ill-will towards the decision. For people who are left wanting a Wii Fit, should just blame the shortage to bad economical timing. The dollar will eventually strengthen, barring any un-forseen disaster. Hopefully the next shipment of Wii Fits will see a stronger dollar, therefore a better ratio for Wii Fit units shipped.

What’s your opinion on this recent news? Do you hold a grudge for Nintendo releasing more Wii Fits for Europe than the US? Or do you just see this as a smart business decision by Nintendo?

8 Comments

  • 1
    CRS
    June 2, 2008 - 4:07 pm | Permalink

    I do believe I’ve pointed this out to you before, in a post several months ago. I will try to explain again.

    Your headline should read “Struggling US Dollar Affects Wii Fit Release.” That would mean that the struggling dollar had an ‘effect’ on the release of Wii Fit. ‘Affect’ is the ‘verb’; ‘Effect’ is a noun.

    When ‘effect’ is used as a verb, it means to bring about, or create. The way the headline is written now, it indicates that because the US dollar is struggling, it caused the release of Wii Fit.

  • 2
    June 2, 2008 - 4:39 pm | Permalink

    edited for correct use of ‘affect’….”The More You Know” *cue NBC star floating overhead

  • 3
    CRS
    June 2, 2008 - 5:27 pm | Permalink

    You made my day. I may be a grammar geek, but I correct because I care. Your blog is awesome. Thanks!

  • 4
    June 2, 2008 - 6:00 pm | Permalink

    It’s not a problem…and feel free to call out any grammar mistakes..I like to atleast make myself seem somewhat professional

  • 5
    Squa
    June 3, 2008 - 12:35 am | Permalink

    I think both issues come into play, but I wouldn’t have thought of the second one. I mean, Nintendo did (and is still kind of doing) the first tactic with the Wii itself. Make a great demand, and you don’t have to drop the price. Plus shortages like this cause free publicity.

    The second one makes sense, but I don’t think I can comment anything on it that would contribute, since I fail at important things.

    Overall, great post, even if I don’t plan on getting Wii Fit. And yay for grammar.

  • 6
    June 3, 2008 - 3:24 am | Permalink

    Nintendo seem to have kept the marketing campaigns running perfectly since release of the Wii here in the UK.

    Demand has consistently outstripped supply and the recent release of Wii fit has given it an extra boost.

    My own cynical opinion is that minor shortages are just what Nintendo hoped for!

  • 7
    June 3, 2008 - 9:49 am | Permalink

    I’m not sure I agree with the whole purposeful shortages scenario. That idea might work if you’re trying to increase “buzz” about a product that isn’t as known to people. But people already wanted a Wii Fit, numerous pre-orders were enough proof. I just don’t see how purposefully under cutting stock could help Nintendo.

  • 8
    June 3, 2008 - 11:01 pm | Permalink

    Seconded – shortages seem at first glance like a great business strategy to somehow help sales. In reality they are only lost opportunity and lost revenue, since some customers won’t wait, some will buy on eBay at higher prices (that the manufacturer won’t see), etc. In short, unsatisfied demand is not good, even if the buzz is nice. There are instances where this does not hold completely true, but I don’t see the Wii (and especially not the Wii Fit) as being one of those cases.

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