Each holiday season, a couple of hard-to-find toys send parents hunting from store to store. And, each season, they're soon forgotten: Has your Elmo gotten any tickles lately?
But this year, it looks like the gift everybody is looking for is the same as last year: the Nintendo Wii.
A year after its launch, the small video game console sells out almost immediately when it reaches stores, even though Nintendo Co. has ramped up production several times.
"Right now, if you work at it, it's not too hard," said John Lawrence, of Fort Worth, Texas, who bought a Wii a few weeks ago for his nine-year-old grandson. It took him some online sleuthing to find one at a local GameStop.
"People have not gotten into the Christmas shopping mode. Once people get into that mindset, this is going to be an impossibility as it was last year," Lawrence said.
With the Wii, Nintendo set out make a console that would entice people who were not hardcore gamers, and it has succeeded. Janet Presti stood an hour in line at the Nintendo World Store in New York on Tuesday last week to get a Wii for her three children, but it wasn't just for them.
Controller has broad appeal
"I played it at my sister's house and I loved it," she said. Her household already has three game consoles: an Microsoft Xbox 360, a Sony PlayStation 2 and a Nintendo GameCube.
The Wii responds to the user moving the wand-like wireless controller, while other consoles are controlled by a confusing array of buttons and joysticks. It also comes with an array of casual, non-violent games that appeal to adults.
Sony and Microsoft have cut the prices of their consoles this fall, but continuing demand for the Wii has meant Nintendo hasn't had to.
Perrin Kaplan, vice-president of marketing and corporate affairs at Nintendo of America, said the console was "priced right from the beginning." A look at eBay shows that Kaplan may be wrong: New Wii systems are selling about $100 US above the $250 US store price.
Some of the demand for Wiis results from trouble in the toy industry, as well as the gadget's cross-generational appeal.
Recalls hurt toy sales
"No one is buying toys right now because of the recalls," said Gerrick Johnson, a toy industry analyst at BMO Capital Markets.
First, toys were recalled because of lead paint and dangerous magnets. Then, Aqua Dots — coloured beads that were making their way to must-have status — were pulled because they were coated with a chemical that turned into the date-rape drug gamma hydroxy butyrate if swallowed.
"It's really unfortunate for the toy industry, because the lead issue was starting to subside, was getting off the front page … and then along comes this, which is totally outrageous," Johnson said.
"Whoever thought that there'd be a day when parents say 'Don't play with your dangerous toys, go play with your video games'?" he asked.
The console has been a tremendous boost for Nintendo, which lost out to Sony Corp. and Microsoft Corp. in the last generation of game consoles. In the quarter ended Sept. 30, it more than doubled its sales to $6.1 billion US from a year earlier, just before the launch of the Wii. It sold 5.5 million Wiis in the U.S. since it went on sale on last Nov. 17.
Demand outpacing supply
The stock market now values Nintendo at $75 billion US, compared to $48 billion US for Sony, which has six times the revenue.
Nintendo has increased the pace of production, but acknowledges that it won't be able to satisfy holiday-season demand.
"It's brand new technology, so you can't build it on just any line," said Nintendo's Kaplan.
In an interview last week, Sony chief executive Howard Stringer said the Wii shortages were "a little fortuitous," and indicated that the PlayStation 3 was poised to benefit from the situation. U.S. sales of the console doubled to 100,000 per week soon after an Oct. 18 price cut, he said.
The issue of demand outstripping supply has dogged Nintendo with the DS handheld game as well, which launched in 2004.
"We've been struggling since launch to keep inventory — we finally have enough of that," said Kaplan.
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