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9:16pm on Tuesday the 23rd of July
WII-CESSION

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.

Dallas Morning News digg this

It will be like Christmas in May when economic stimulus checks from the IRS start raining new found* money into our bank accounts. The expectation is that everyone must spend that money like drunken congressmen on big ticket items.

Now with the Wii becoming magically available in large numbers... Nintendo offers the obvious solution; Buy a Wii to save the economy!

Wait, we are talking about alleviating Japan's recession, right?

* until those tax credits are applied to your 2008 tax return...

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