There is no doubt that this holiday season, one of the hottest gifts is the Nintendo Wii. Nintendo of America's president, Reggie Fils-Aime, warned gamers months ago that supplies would be short and tried to alleviate the problem with a voucher program through GameStop. It's clear this won't be enough to meet demand, causing Nintendo to strongly urge retailers not to force consumers to buy bundles of software and accessories in order to take advantage of the shortage. At Opposable Thumbs, we ran a post about how to deal with these bundles and asked readers to contact us with their horror stories. One worker followed up quickly with his own twist on holiday price gouging: instead of selling the systems with bundles, a chain of Illinois/Missouri gaming stores called Slackers is simply dumping its stock onto eBay for the Buy It Now price of $399.99, an almost $150 markup.
"In the past year, none of the 12 [Slackers locations] have sold any Wiis except for a one-time promotional deal, where we did force customers to buy a game with it," the employee told Ars Technica. "The real crime is that we get Wii shipments regularly. In fact, right now we haveabout 20, but none of them make it to the store front. They all get put on the store's eBay site at a minimum $499.99 buying price."
Our source then told us that the price has since been lowered to $399.99, (they weren't moving at $499) and sure enough, there are three Wiis available through Slackers' eBay storefront at $399.99. Looking back in the store's history, one can find other Wii sales in its feedback, with the auction advertising "NEW WITH GAME." The game of course being the bundled Wii Sports.
Ars Technica contacted the St. Louis Slackers location for confirmation of the practice. When asked if the allegations were true, there was a long silence. "That is something you'll have to speak with the owner about," we were told. We have since attempted to contact Slackers' ownermultiple times, but have been unsuccessful. Nintendo has also not responded to our requests for comment on this story.
There are a couple of reasons Nintendo—and every other console manufacturer—is so strict on keeping one price point. Raising the price in this way hurts Nintendo's ability to position the Wii as the low-cost system, and it also cuts Nintendo out of ashare in the higher profits. At the same time, Nintendo keeps retailers from offering the systems as low-priced loss leaders, dropping the console below the suggested retail price to get customers into the store. Nintendo wants to be sure it controls the pricing, and Fils-Aime has talked in the past about the power of the Wii's low price.
While dropping systems on eBay mightseem like a quick and easy way for retailers like Slackers to make money, raising the price on Nintendo's system forone's own profit is a surefire way to get cut off from future shipments of games, systems, and accessories. "We don't have to remind retailers of the strength we have right now," Fils-Aime said in a recent interview with Reuters. "We are simply making an observation and that reinforces our point quite nicely with retailers."
Nintendo does indeed have the strength right now, and our source also told us he has reported his employer's practices toNintendo. Unfortunately, it's unlikely that Slackers' customers hungry for the system are aware that Wiis are apparently being stockpiled in the store room for eBayers willing to pay $400 instead of on store shelves at Nintendo's MSRP of $249.