Nintendo and Deliberate Shortages
Nintendo and Deliberate Shortages
In late 2016, Nintendo needed to make up for the lack of a big boom for the holiday season. As their new console-handheld hybrid system, the Nintendo Switch, wouldn’t release until the Spring, Nintendo released the “NES Classic” system, a plug-in-play miniature version of their famed home console from the 1983. While not supporting additional games to be bought on cartridges like the original, it came built in with 30 classic games to play, and fans were excited if only for the novelty of owning such a neat item. Unfortunately upon launch, the system was ludicrously hard to obtain. Fans drove from store to store in the unlikely hope that one could be in stock. The most of the few that managed to buy them often bought them in large quantities and sold them online for higher prices, making it incredibly difficult to obtain one for a reasonable price. It wouldn’t be a first time a situation like this has happened. In recent years, Nintendo has had a history of under supplying their products, an event known to economists as a shortage.
Some people speculate that the practice might be done on purpose, as the word of mouth about the rarity of a new product can help generate interest and make it seem like the device is in high demand, hopefully causing a bandwagon effect. It would seem that this trend of under supplying for hype first started with the release of the Wii in 2006. After receiving less and less financial success with each generation since the Nintendo 64 in 1996 and facing their worst selling home console at the time, the Gamecube, the Wii was an extreme success for the company as the third best selling video game home console of all time with over a hundred million consoles sold (VGChartz). The system is famous for its incredibly high demand and rarity during its launch, in which people weren’t able to find one for months. Nintendo might have thought that part of the Wii’s major success was due to this phenomenon, and have tried to imitate it with each major launch since.
In 2012, Nintendo’s Wii U home console, the under-advertized successor to the Wii, was also relatively hard to find at launch, despite the fact that just a month or two later, sales plummeted drastically (Byford). It’s not so much that the system was in high demand with the general public, but the low supply made it hard for even the demographic of loyal Nintendo fans to acquire the system at launch. Only a few months later near the end of 2013, the system received a price drop, from a price of $350 for the 32GB “Deluxe” edition, to a standardized $300 price while ending production of the $300 8GB “Basic” Edition.
Just a few years after the Wii U’s launch, Nintendo launched an entirely new line of products: collectable figures that work with games called “Amiibo.” Riding the wave of success from similar technology used in games such as Skylanders or Disney Infinity, Amiibo were a perfect fit for Nintendo. The toy and functionality aspect could appeal to their younger audience, while the collectable aspect could appeal to their older, loyal fans. Unfortunately, upon the first wave of amiibo for Super Smash Bros, the chances of younger kids getting their favorite Nintendo character amiibo were rather slim. Similar to the NES classic, the figures quickly experienced a shortage and blew up on the second hand market with insanely high prices.
Those who purchase new products to sell for higher prices are known as “scalpers.” Not only do these people annoy consumers, their practice means that Nintendo could be missing sales of their own. While Nintendo does get the initial profit from the scalpers that buy the items in large quantities, the rapid fast shortage leaves little room for consistent profit overtime. With the high rarity of the product, consumers feel forced to buy it on the second hand market if they want it, or alternatively, not buy it at all. This causes Nintendo to miss out on a boat load of potential sales, and fans to be disappointed and unsatisfied.
Bizarrely enough, it seems like Nintendo has already seized production of the highly scalped NES classic only a few months after its release, a baffling decision to many (Orland). The device has still been in such high demand, meaning they could still make profit from it, yet instead of restocking they just dropped everything before most even had a chance to purchase one. Rumors speculate this is to focus production on a successor, the SNES classic, to release at the end of this year, but it still seems like a hugely missed opportunity when most that want the system still don’t have one.
Besides this, the newly released Nintendo Switch came out and is also relatively hard to obtain, but this actually seems to be the result of genuine interest as Nintendo has reportedly tried to keep it in stock and the system happens to be one of the fastest selling successes they’ve had since the Wii. But in the same statement Nintendo claimed they would try to prevent Switch shortages, they also said they’d restock the NES classic...and we see how that turned out (Carter). Hopefully from here on out, obtaining Nintendo products can be a lot easier, but recent decisions still make it seem unlikely for Nintendo to change their bizarre business practices anytime soon.
Works Cited
Byford, Sam. “Wii U Sales Collapse with 'Well under' 100,000 Sold in January.” The Verge, The Verge, 15 Feb. 2013, www.theverge.com/2013/2/15/3990934/npd-january-2013-sales-figures-wii-u. Accessed 3 May 2017.
Orland, Kyle - Apr 13, 2017 7:31 pm UTC. “Nintendo Hates Money, Discontinues the NES Classic.” Ars Technica, 13 Apr. 2017, arstechnica.com/gaming/2017/04/nintendo-hates-money-discontinues-the-nes-classic/. Accessed 3 May 2017.
Carter, Chris. “Reggie: Nintendo Switch Won't Have Shortages, NES Classic Getting 'Continued' Stock in the US.” Destructoid, www.destructoid.com/reggie-nintendo-switch-won-t-have-shortages-nes-classic-getting-continued-stock-in-the-us-412425.phtml. Accessed 3 May 2017.
“Game Platforms.” VGChartz, www.vgchartz.com/platforms/. Accessed 3 May 2017.
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