Does anyone here remember the Wii craze in 2006 when there were severe shortages of consoles in all retailers? How about the Amiibo frenzy of 2014 when Nintendo kept running out of specific figurines? How about the most recent NES Classic fiasco in which Nintendo, once again, fails to meet supply and demand? It appears that despite their claims otherwise, Nintendo never seems to fulfill their promises of ensuring a readily available stock for hot new items. While some of us ask ourselves, c’mon Nintendo don’t you want our money? In the meanwhile, Nintendo is patting itself on the back, and laughing as their minimal product flies of the shelves. You might not believe it, though, as it’s strange for any company to be happy about missing out on potential sales. There is however, a certain method to Nintendo’s madness.
3. Minimal productions decrease waste and losses
It’s no secret that Nintendo has recently taken several beatings. From the lackluster sales of the Wii U, down to the fans mixed reactions to the Nintendo Switch; for these reasons Nintendo has good reason to be tight with their budget. By producing smaller amounts of units, and releasing them sporadically, they ensure that less NES Classics are produced and left unsold. Nintendo is being hesitant with its expenditures, and they’re placing their bets on the Nintendo Switch. Yet in order to minimize risks or potentially hurting their bottom line, they have to be thrifty with their production line. This is especially true if we consider the fact that the games attached to the NES classic can all be bought in the Wii U’s Virtual Console.
It’s possible that Nintendo is merely thinking they’ve re-released these titles countless times. Why would fans continually buy these games when they can get the same experience on the Wii U or 3DS’s virtual console? Emulators are also readily available and while we don’t advocate their use, it’s certainly an avenue that might decrease the earnings for the product. If we take these factors into account, it’s possible to see that Nintendo merely expected their diehard fans to buy the product. But who in their right mind can possibly guess the exact quantity of that type of person? It’s not like their fan support hasn’t been dwindling in the last few years, right? Why would they want to mass produce an “outdated” product to a market which seems to criticize their nostalgia abuse after all?
It is interesting, however, to note that as the scarcity of their products rises, so does the demand for said items. This is in fact a natural human reaction, and can be witnessed by many of our fads over the years. But let’s elaborate on why Nintendo could be doing this on purpose…
2. Scarcity increases demand
Marketers have known for years that as desire increases for a product so does its rarity. If we take a look at recent history, aside from the Wii U and 3DS, Nintendo has always had problems meeting the demands of their customers. Consoles are constantly running out of stock, certain Amiibo never seem to arrive, and peripherals are only sold in specific stores for Nintendo. It’s a real shame; by failing to meet the demands of the customer, Nintendo is missing out on some cold hard cash, but is it really? As stock becomes scarce, the product itself becomes more desirable for customers; this allows Nintendo to gauge how many units it can ship without losing potential money. Nintendo creates this specific bottleneck which allows them to control distribution of their products. By controlling the distribution, they ensure both minimal losses and an increase in demand for said product.
The problem with this situation is that scalpers come into the picture rather quickly. Scalpers are people who will purchase the entire stock of a product in order to sell it on at a profit. While this isn’t detrimental to Nintendo’s bottom line, as they already got their money for the product, it’s awful for the average consumer as scalpers have been known to sell upwards of a 1000% increase in price. While this sounds like an unfair practice, it’s 100% legal, and has the unintended side-effect of creating a false sense of demand/exclusivity.
The perk of exclusiveness is a very powerful tool in marketing. When companies aren’t selling a product, they’re selling the representation of said item. Nintendo fully understands this, and thanks to the scalpers they’re able to get away with it without feeling guilty. But this tool isn’t necessarily unique to them because…
1.Nintendo is a toy maker
Has anyone ever looked at the price of Star Wars collectible figurines? If you haven’t, then allow me to elaborate on this point. When toy makers such as Hasbro make figurines they sell hundreds upon thousands of the main characters of any series. None of those characters actually gain any value over time as the market has been saturated with them. You might be asking yourself, how does that make them collectible or worth anything then? Well, the answer is that it actually doesn’t. The figurines that actually gain any value are those rare and hard to obtain secondary characters which had a limited release.
When Amiibo’s first came out, it wasn’t the common ones like Mario that had an insane cost on websites like eBay or Amazon. No, it was Marth, Villager, and Wii Fit Trainer. These three alone could buy you the entire collection of Amiibo’s at the time, and were extremely hard to find for a long time. When Nintendo finally made them readily available, their price dropped considerably, and now you can practically find any Amiibo for about five dollars. Exclusivity and rarity are what tend to drive the market and Nintendo understands this factor rather well.
While evidence can appear for the contrary, Nintendo isn’t stupid, and they have an entire team of market analyst whose job it is to determine what does or doesn’t work for the bottom line. We must consider this a possibility, as Nintendo originally started out as a toy maker, and still considers itself as such. Acting like a toy maker might not hurt Nintendo’s bottom line, but it doesn’t do any favors to a company which caters to gamers. These tactics will not work forever, and Nintendo will eventually have to up their ante. Because in the end this simply shows us (the consumers) that Nintendo has no faith in their own products.