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Fils-Aime: 'This Shortfall Benefits No One'
by Leigh Alexander
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December 14, 2007
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Elsewhere in his conference call announcing a rain-check partnership with GameStop, Nintendo of America president Reggie Fils-Aime recently addressed the continuing supply constraint issues plaguing the Wii, reiterating that "overwhelming demand" continues to hamper the company's efforts to provide enough Wii consoles to retailers.
"We expected Wii to perform extremely well within the historic launch parameters of the video game industry," Fils-Aime allowed. "What we didn’t expect was to write an entirely new chapter in that history and have it happen so fast."
Fils-Aime cited the appeal of the Wii to non-gamers, saying it had taken away "the seasonality of sales we've come to expect in the past," and noting that Nintendo has upped worldwide production of the Wii to 1.8 million systems per month, twice as much as at the console's launch.
"We’ll keep production at that level for quite a while," said Fils-Aime. "I get personal calls from people wanting to know why we don’t just manufacture more. The fact is that production depends on components from a wide array of suppliers, and if one can’t increase capacity, we can't increase ours."
Gamasutra asked Fils-Aime if there was a specific component or supply line that was challenging production. "There’s no single element that is constraining our production," he said.
Fils-Aime added, "And again, I want to point you to the fact that a year ago, we were at a rate of a million a month, and we’ve nearly doubled that. If you look at that run rate, it would lead to a level of production and supply that is unheard of for our industry... The issue continues to be a level of demand that has been unheard of in our industry."
MTV's Stephen Totilo asked Fils-Aime if Nintendo had any plans to move any portion of its manufacturing to the U.S., citing NPD numbers that suggest that America is getting 50 percent of the Wii's total production lines.
Said Fils-Aime, "As we look to the future, the decisions being made by the executive committee of Nintendo are to put the hardware where it would sell out the fastest and reach consumers the fastest. Sharing information and arguing for a larger share for production... is what I do every week."
However, he added, "We are looking to have a larger share of production, but in the end, that isn’t my decision. We have no plans to manufacture the Wii system here in the Americas."
"This shortfall benefits no one," Fils-Aime stressed, noting that Nintendo has "tripled" the workforce at its Washington distribution facility. "Enough systems would make everyone -- including me -- much happier."
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