During the Wii shortage Nintendo was criticized for not increasing production to keep up with demand and some analysts even went as far as to call the shortage a loss. Let's home Nintendo didn't pay too much attention, otherwise we will see a bigger increase in depreciation on their income statement.
When the product was hot they could have capitalized the extra production. Nintendo handed hundreds of dollars per unit to ebay sellers. Years later the product is sitting on the shelf - it has nothing to do with the lost sales. Eventually any product has emerging competiors and buyers become bored.
Well, that depends on what perspective you have... I rather see an average price increase of $50 on ebay than excess production sitting on store shelves. Converesely, I don't want my product to be so understocked that people are getting stabbed over it (sound familiar?). Granted $50 increase on a retail $250 is a 20% mark-up, which is high, but not astronomical, or even too unreasonable... I think... and you have to ask yourself how much of that that shortage is actually due to ebay profiteering, especially when the system becomes an online bestseller. Plus, let's admit it, it added to the hype.