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Wii Shortage Prompts Nintendo to Pull U.K. Ads

Nintendo is poised to halt British television advertising for its Wii because of a severe shortage of the games console.

A spokesman for the Japanese group said that demand for the Wii, which made its global debut in November 2006, "has been unprecedented and higher than Nintendo could ever have anticipated."

He said that the company was "looking at moving some advertising on some products into early 2008" because it wants to "act responsibly."

[Another unnamed spokesman told the British Web site MediaWeek that ad spots bought for Wii ads would be used instead to promote the DS, Nintendo's hand-held console. But Nintendo's marketing chief said last month that U.S. advertising plans would stay on track.]

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Nintendo has raised production targets several times in recent months and now plans to ship 17.5 million units globally this year, up from 14 million.

Dismissing suggestions that it has engineered shortages, Nintendo says that it is working at full capacity to produce 1.8 million units a month.

According to analysts, next year will decide whether Nintendo's tactic of building a video games machine "for people who don't like video games" has provided, in the Wii, a vehicle for a long-term strategy.

If it does not, Nintendo executives privately admit, the present severe shortages could prove to be "a very serious missed opportunity."

"The issue of supply management has to be questioned, not least because 2008 is going to be the crunch year for the Wii," said Piers Harding-Rolls, an analyst for the London-based market-research firm Screen Digest. "It is then that we will discover whether it is a fad or something with legs."

The Wii has outsold Sony's PlayStation 3 and Microsoft's Xbox 360 each by more than two-to-one this year. Its success is built on its appeal to "non-core gamers" — women and older people hitherto ignored by the games industry.

According to Screen Digest, the Wii will achieve game software sales of more than $10 billion in the next two years. Those revenues are expected to peak in 2009 — and in the same year the value of games sold for PlayStation 3, at more than $6 billion, are forecast to overtake those for the Wii for the first time.

As little as a year later, analysts say, Nintendo must have a replacement console ready. Sony, meanwhile, is not expected to unveil a successor to the PS3 until 2013.

Christmas shoppers searching for Wiis may not appreciate the fact, but financially the 118-year-old company has underpromised and overdelivered. In the past two years, Nintendo has achieved its full-year financial targets in only nine months.