Around the Wii in 800 Words

A few weeks ago, I asked readers to send me their questions regarding the Nintendo (NTDOY Quote) Wii, and the response was staggering, echoing the media's distinct focus on the hot console. So, here are my answers to a small selection of the questions, covering a decent amount of ground, from stocks to Christmas presents.

What's the best way to make money off the Wii?
-- Eric

The easiest way to make money on the Wii is to buy a console at retail and resell it at a big premium. I firmly believe you can make 50% on your money at the very least. But if you're talking stocks, the best way to play the Wii is video-game retailer GameStop (GME Quote), which is currently a pick in the Breakout Stocks newsletter.

As the leading video-game retailer in the country, I expect GameStop to see huge sales of Wii products during the holidays. And unlike retailers like Best Buy (BBY Quote) and Circuit City (CC Quote), GameStop is 100% focused on video games and won't be dragged down by weaker areas of consumer electronics.

Plus, as I pointed out last month, most third-party Wii games don't sell very well, and thus Wii software sales are a very small percentage of the overall sales of video-game publishers like Electronic Arts (ERTS Quote). GameStop will also benefit from extremely strong sales of non-Wii games like Microsoft's (MSFT Quote) Halo 3, Activision's (ATVI Quote) Call of Duty 4, and Ubisoft's Assassin's Creed.

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Is Nintendo artificially controlling the supply of the Wii?
-- Ed

Nintendo probably isn't intentionally holding back supplies of the Wii, simply because it would be foolish to give up sales before the higher-priced Microsoft Xbox 360 and Sony (SNE Quote) PlayStation 3 come down in price and become more competitive.

Nonetheless, the fact that demand continues to outstrip supply can be considered a positive from a psychological standpoint -- the harder it is to find something, the more people tend to want it. If Wiis were piled up on store shelves, demand might actually fall.