Kesh

To be honest, your thought-provoking post would be better placed in a blog whether the average age of the readership is about five years older. Most of the comments here are either trivial or worse, purporting to know something about the war on the back of popular culture (Hollywood films).

let the dissection commence

rdj75: in 'standard economics', the producer will match marginal cost to marginal revenue as I'm sure you know. And you are correct that a monopolist has an incentive to underproduce. What Cronus points out is that Nintendo could quite easily sell more units without needing to cut its price. Hence Nintendo does not face diminishing revenues from increasing production. Your reference to the law of diminishing returns is inapplicable unless you are proposing that Nintendo faces a rapidly rising marginal cost. Yes Nintendo's returns will fall with every extra unit, but that is marginal returns, and that assumes rising marginal cost.

Lone Starr: following on from your post, the strategy of creating a perceived shortage in order to gain hot item status has many complications. It is unclear how creating a risk for the parents that the Wii will be unavailable can create a demand boom of these proportions. If I were a parent and I heard a toy could be unavailable at Christmas time, I would be unlikely to spend hundreds of dollars to insure against the risk that this toy will be the hot
item. You could argue that the shortage prediction also tells parents that their child is likely to catch the 'Wii bug', but surely the parents have good reason to believe their children will want one, beyond this vague indicator.

Moreover, if I were Nintendo and I had spare capacity, I would hold stock back and release it once hot item status has been achieved.

igonre me above, just use Cal's method

WARNING! I downloaded Prince of Persia and the install program said 'you must live in the US to play this title'.

Better shut up before I start swearing.

if its a rush you want geometry wars does the trick. and you could run that on NES

"Artificially creating demand by sitting on stockpiles..."

I've had it with this BS argument. When was the last time you went and spent a hundred bucks on a console because you heard it is in short supply?

Seriously, how could this work? Both consoles have been out for a while now so there is no point pure publicity stunts, when it means compromising on sales.

Only 3 ways that I can see:

one, idiot parents see the news preorder consoles because they don't know how else to decide. But since a console is a major purchase I would think the parent would ask her kid first whether he wants it or not.

Two: people rely on sales reports of the console to tell them how popular it is, and then predict how much good software it will have based on that information.

Now in my experience most people buy consoles on the basis of the games that have already been announced. And more to the point, most poeple do not spend the time to predict third-party support for their consoles 3 years down the line.

Three: people want the same consoles as everyone else, if only for more multiplayer

In my experience, people want to buy the same consoles as their friends, not a million foreigners. Sales figures do not tell them what their friends are buying. Besides, Wii multiplayer is restricted.

Bear in mind that many people cannot be bothered to wait for preorders, so many of the idiots described above would simply not bother.

I see no way of arguing that creating a shortage of wiis will increase demand for it. That might work for FASHION items, when you can jack the price up, but I doubt it would work for a console.

very interesting thought there Frowelishnu. but wouldn't you say the decision to go to war is where the moral judgements are made? Do soldiers such as yourself actually follow on-the-ground moral judgement rather than orders? If not then these devices are a good way to reduce the number of deaths that war brings to the US. Now you could argue that since most deaths in American wars occur on the side of the invaded, your idea of 'easy killing' might increase the number of dead overall.

lol they must really think theyre going to sell out regardless. probably hoping that the killer apps will be out in time etc.

this is going to be hilarious

lol you guys with your nationalist concerns...does the developer being Scottish mean that you, a Scot are better for it? Same goes for Yanks too of course.

Now if it was made by an Englishman on the other hand... :)