Nintendo Denies GameStop CEO's Managed Scarcity Claim

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In a public note to investors yesterday, GameStop CEO R. Richard Fontaine criticised Nintendo for what he believes to be managed scarcity in an effort to further balloon the buzz surrounding the hot-selling Wii. “…This is just my opinion, but I think [Nintendo] intentionally dried up supply because they made their numbers for the year. The new year starts April 1, and I think we’re going to see supply flowing.”

True. The game manufacturer hit its 6 million Wii target a few weeks ago, so there’s no denying that a roll over of profits into Q2 wouldn’t help Nintendo’s books look even better. However, Nintendo denied claims of slow supply today in an email sent to GigaGamez. “We knew we had a potential hit on our hands, but we had no way of predicting demand for Wii would be this intense,” company spokesperson Julia Roether told us. “We are doing everything we can to ship product to retail as quickly as possible.”

Keep in mind GameStop — the largest US game retailer — sold over $5 billion of the $14 billion dollar game industry (or 35%) last year, so Fontaine might know a little something when it comes to retail. The strongest case for the managed scarcity claim depends on how much the “sell out” factor and its corresponding buzz equate to continued Nintendo profits. It’s sure to be a lot, be it a fully legitimate short supply or somewhat inflated. The strongest case against the managed scarcity claim is that Nintendo turns a nice profit on each Wii sold contrary to Sony and Microsoft losing money on their respective systems. Managed or not, Nintendo is still dominating total hardware sales at the moment.

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