Nintendo of Japan has just inputed some tidbits of comments concerning DVD Playback on the Wii console in their Q+A section of their website, telling people that it won’t make it out in 2007. Reasons for this is due to the need to “maintain effective production in order to keep up worldwide demand for the Nintendo Wii.”
This isn’t a cancellation of any sort as the company simply stated it won’t make it out by the 2007 release window. No date has been announced, so we’ll have to wait for news in the later future.

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