In a lengthy article GamesIndustry’s Rob Fahey says that Nintendo supply constrained the original Wii. They didn’t do this to create hype around the product, but instead they decided to do it because the innovative console was losing money on each unit sold. Fahey says that by holding back units the company waited for manufacturing costs to fall so they that would make money on each unit.

“Nintendo, for example, supply-constrained the Wii in its launch window; that strategy was not in order to create sales hype, as it was often accused of, but rather because the device was losing money on each unit sold. Had Nintendo fulfilled demand completely, it would have taken a huge operating loss. By waiting, it got to hang on for manufacturing costs to fall before supplying the demand in the market.”