What's really behind the Wii shortages? Is it that Nintendo can't keep up with the demand, or are supplies of the console being artificially limited in order to drive up sales?
The idea that Nintendo has somehow put a choke-hold on sales in order to artificially create scarcity and therefore increase demand does have some merit, but to do this over the holiday period just doesn't make any real sense. People are going to be buying consoles over the holiday period and if there isn't a Wii available, many shoppers will be drawn to other consoles - especially the Xbox 360 and the PS3.
If Nintendo is artificially strangling demand, all that's actually doing is pushing customers to other platforms. Not only does Nintendo lose out on console sales, the company also loses out of games and accessories revenue too. If Nintendo can't supply, Microsoft and Sony are there to pick up the slack.
So no, I don't believe that Nintendo is stifling production. I believe that 1.8 million a month is a ceiling that Nintendo isn't willing to cross for the sake of quality control. With a product that popular, no company wants to have to field too many returns.