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The Divnich Tapes: Wii Supply Still Constrained, But Not For Long

The Divnich Tapes: Wii Supply Still Constrained, But Not For Long Exclusive

August 19, 2008 | By Jesse Divnich

[Continuing his Gamasutra-exclusive NPD analysis following the release of July's game sales figures EEDAR's director of analytical services Jesse Divnich notes that, though Wii supply was still constrained in the previous month, Nintendo is close to meeting consumer demand before the holiday season.

Previously: Disappointing Xbox 360 hardware sales, despite a discounted Pro model.]

Many have raised the question as to whether July’s results for the Nintendo Wii are an indication that supply is finally outpacing demand.

Fortunately, for Nintendo, what looks like a decline in demand is in reality the same scenario that has played out for the last year -- supply is still constrained.

Using figures from pricing data site Video Game Price Charts, we can see that on reseller markets, Wii hardware is still selling above retail MSRP.

In fact, we estimate that over 15,000 Wii hardware units were sold through eBay alone in July, a significant amount.

Add in other reseller sites, and that number easily surpasses 20,000 units. I find it hard to believe that, on average, 20,000 consumers would pay prices above MSRP if the hardware were easily accessible at all North American game retailers.

While demand is still strong, we are noticing a continued decline in the gray market price, which is a good indication that supply and demand are close to equilibrium. Given the trend, it is likely that supply will finally outpace demand before the holiday season.

However, keep in mind that this potential supply glut would be within a very small window, as demand for Wii hardware in November and December will likely outpace supply once again.

[Jesse Divnich currently serves as the director of analytical services at Electronic Entertainment Design and Research (EEDAR). The preceding is the views and opinions of one person and not of EEDAR, The simExchange, GamerMetrics, or Gametrailers.]

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