[quote name='foltzie']There is no business case that says produce less for buzz = sales in the video game realm. Wouldnt you agree that it is far more reasonable that demand simply outstrips supply? Why would someone in the money making business leave money on the table? Pent up demand can dissipate or be directed into something else. [/QUOTE]
There's no business case because no company would readily admit to withholding supply in order to drum up demand and PR...they'd be vilified relentlessly. But, we do know it happens in the rest of business.
As long as demand far exceeds supply, Nintendo is put in a position of great power. When it comes to distribution, they can ask for a higher-than-normal price, knowing full well stores will pay it, since they know the items won't be on the shelf for more than an afternoon. It also serves to artificially inflate the value of each product, as hoarders start selling them for 100% markup on eBay, thus making MSRP start to look like a damn good deal...making it more likely that a consumer will pick one up if they see it, even if they're only tangentially interested in the product itself.
'Course, there's a balance they need to achieve for everything to go well...need to put out as many units as possible while never allowing stores to build up a surplus in order to maintain their rarity, while making sure that demand doesn't dissipate. But Nintendo has an entire department, if not building, full of guys in suits who figure out this kind of stuff. Am I going to say that I'm 100% certain that this is why supply of the Wii was so terrible for over a year? No, I just wouldn't be surprised if it was.