REDMOND, Washington Nintendo Co Ltd 7974.OS is having trouble planning for the coming months because of shortages of its Wii video game console, and the company is also seeing signs of higher-than-expected demand for its DS handheld device, a top U.S. executive said on Monday.
"The level of demand we are facing complicates all of our future business planning," Reggie Fils-Aime, president of Nintendo of America, told Reuters in an interview. "All of that becomes a much tougher exercise until we have supply and demand curves that intersect."
The DS has been the best-selling piece of gaming hardware this year, moving 1.5 million units in November, according to market research firm NPD.
"The DS continues to perform exceptionally well, with some retailers voicing concerns about DS inventory going into the holiday," Fils-Aime said.
Nintendo, which is striving to meet Wii demand more than a year after the machine first went on sale, was also trying to discourage the practice of bundling the consoles with extra games or accessories and selling it for a higher price.
A Wii by itself sells for $250 -- cheaper than Microsoft Corp's (MSFT.O) Xbox 360 and Sony Corp's (6758.T) PlayStation 3 -- but some retailers have offered bundles priced for double that price.
"Retailers have already been given feedback that we are not big fans of that. We think it masks some of the price advantage we have versus our competition and, frankly, the consumer should decide what they want," Fils-Aime said.
Asked if Nintendo had threatened such retailers with fewer Wii shipments, Fils-Aime said only that the company carried a lot of weight as maker of one of the most highly sought items this holiday season.
"We don't have to remind retailers of the strength we have right now. We are simply making an observation and that reinforces our point quite nicely with retailers," Fils-Aime said.
Nintendo's top priority was to satisfy Wii demand because the issue was an obstacle to future plans, Fils-Aime said.
Unable to accurately forecast how many Wiis will be sold in the coming months, Nintendo is finding it difficult to plan for new games, such as "Wii Fit," an upcoming physical exercise game that uses a pressure-sensitive board.
"We at Nintendo America are focused on getting to the point when any consumer can walk into any of our retailers and find a Wii. Then we can plan, on an ongoing basis, the rest of the business," Fils-Aime said.
He said he had high expectations for Nintendo's recent Wii game "Super Mario Galaxy," which some analysts said had strong but not spectacular first-month sales despite being one of the most critically acclaimed games of all time.
The game sold 1.1 million copies in the United States in November, but fell short of marks set by other blockbuster titles such as Microsoft's "Halo 3," which sold 3.3 million copies in its first month.
"Galaxy will have extremely long life and will have extremely large numbers throughout that entire life," Fils-Aime said. "Mark my words, look in six months and no one will have any remembrance that it 'only' did one million copies in its first month."
(Reporting by Scott Hillis; editing by Richard Chang, Gary Hill)