Damn Euros! - FMVperformance.com : The site for all your Ford Mazda and Volvo needs
 
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post #1 of 1 (permalink) Old 03-30-2008, 06:40 PM Thread Starter
mrc
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Join Date: Apr 2007
Location: Biloxi, MS
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Damn Euros!

Despite past feelings for the Frenchies, Nick Sarkozy seems like a smart guy. I have a Wii, so this doesn't really affect me, but I found it interesting the reasoning behind the Wii shortages in the U.S. It's time to start blaming the French again!

"Wii shortage may finally be near an end

03:03 PM CDT on Saturday, March 29, 2008
By VICTOR GODINEZ / Staff writer [email protected]

OK, one last stab at explaining the Wii shortage.

I was talking to a game-industry analyst this week about how retailer GameStop (which is based in Grapevine) will fare if there is a recession or economic slowdown.

During the course of the interview, the analyst, Michael Pachter at Wedbush Morgan, said the real culprit for the Wii shortage in the U.S. is the weak dollar.

I know this is getting rather dense for a game column, but bear with me.

With a weak dollar, foreign companies that sell their goods in the U.S. for dollars and then convert those dollars to their native currencies get a smaller profit than if they sell their products in countries with strong currencies of their own (such as Europe with the euro). In other words, Nintendo makes a bigger profit on Wiis sold in Europe than on Wiis sold in the U.S.

So Nintendo, Mr. Pachter said, has been behaving perfectly rationally by sending excess Wii consoles to Europe to satisfy the more profitable consumers there.

But now that demand in Europe is subsiding to normal levels, those surplus consoles will be redirected to American gamers, Mr. Pachter said, and the Wii should finally become more plentiful in the States later this year.

That jibes with the time frame GameStop laid out for when it expects the Wii to become easier to find in the U.S.

Mr. Pachter's assessment makes a lot of sense to me, and it explains why Nintendo has been so reluctant to account for the Wii shortage. No one wants to hear that they're second-class customers, but that's exactly what we American gamers are right now.

Of course, all things being equal, Nintendo would probably have preferred to be able to supply both Europe and the U.S. simultaneously. But the company might be betting that the dollar will be stronger by the time European demand for the Wii subsides, and that may well happen.

Regardless, if you can't find a Wii this weekend at Wal-Mart, you can blame the French (and Germans, Italians and all the rest). "


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