As usual, the answer is likely a mixture of all the above. Here's what I think. The Wii shortfall is intentional.
Though only partly. Nintendo has deliberately erred on the conservative side when ramping up their production. That's not to say that they weren't right to do so. Supply chain experts generally agree,
it's better to be undersupplied than oversupplied. Although undersupply may
cost an unknown amount in lost revenue, oversupply guarantees
extra costs for inventory storage, buy-backs from vendors, etcâ¦ There's an added, now-obvious bonus: a desirable product that's always out of stock can inspire idiots to camp outside of a store waiting for it, prompting "Hey, check out this idiot sleeping outside in December" news stories that inadvertently provide free publicity for your product.
However, just because Nintendo's conservative production plans were intentional, doesn't mean they don't regret it. They are undoubtedly not making as much money this Christmas as they could be, and if there's one thing enormous companies love doing, it's making money.
Actually, that's kind of the only thing they love doing.
Let's also consider whether Nintendo may simply have been incompetent in their production ramp-up. It's important to realize that modern video game consoles aren't built in some enormous factory somewhere, where the raw ingredients (silicon, children's laughter) are poured in one end, and Wii's come cascading out the other end. In real life, there's a factory in Taiwan that makes a chip that gets sent to another factory in Taiwan that combines a bunch of chips into a widget, and sends that widget to another factory in Korea, where it gets combined with some more chips and the necessary blue LED's and then sent on to another factory and so on. Any hiccup, slowdown, or break in the chain can cause delays. Supply chain management is a complex and erotic beast. Mistakes happen.
Although, if anyone should be good at it, it's a company that has been in the business of making complicated video game consoles for 20 straight years.
Final thought: Here's a chart (courtesy vgchartz.com) that shows the worldwide sales rates (since launch) of the Wii and GameCube alongside the current reigning sales champ, the PS2.
So after making one of the most disappointing video game consoles of all time, the biggest error Nintendo made is failing to anticipate that they'd create the fastest selling video game system (over 1 year) of all time. That kind of mistake is a pretty good one to make, and may not even be a mistake at all. It's sort of like hiring a bunch of strippers for a bachelor party that end up getting