Posted on August 23, 2021 in Uncategorized

Nintendo, and Always Underproducing


Is it intentional? It’s difficult to say. Artificial Scarcity, the process of deliberately limiting the supply of something that would otherwise be easy to get or find, causes prices to go up (or stay up) with demand. It’s pretty common. Diamonds, for example, are only expensive because one company owns most of the mines and supplies most of the stores.

So too are other commodities limited, and jaded consumers tend to believe malice over incompetence when it comes to the supply chain. But sometimes scarcity isn’t artificial – real scarcity also happens all the time, even when it should be possible to just ‘make more’. See GPU cards, for example. Many companies make them, and yet they’re very expensive and difficult to find right now. The manufacturing process is long and complicated, so they really are that scarce. Is Nintendo in camp one, or two?


The NES Classic (2016)


The NES Classic was a hit. It was hugely popular and sold out quickly; fans hoping to get their hands on one waited weeks or months after the release date just to order one. This was a re-release of an older console, one that didn’t sell a ton of units in the US, but one that was still quite popular among gamers in the 90’s. Nostalgia had fans tripping over themselves to give that experience to their children, or perhaps relive it themselves. Either way, any high-quality remake of an item that was high-quality in the first place generally does alright. And it sold really well in its first weeks!

And then Nintendo stopped making them, effectively doubling the price of the ones being resold. It didn’t come down all at once, either, as the US stopped producing units before Europe did. For some reason. Obviously, people wanted to know why, and Nintendo didn’t really provide a why, just that they’d announce it if it ever came back.


The SNES Classic (2017)


This one was easier to find in person… at first. Learning from the NES Classic, Nintendo ramped up production enough to meet the initial demand, only for that supply to taper off once again, leaving fans to buy from resellers if they couldn’t get it during the first wave. Vendors didn’t seem to know when they would be getting said SNESs, so pre-ordering turned into a nightmare.

Walmart canceled pre-orders after realizing that they went live before they meant to, Target’s website crashed, and bots were being used to swoop in on pre-orders before humans could get to the listings, meaning that the first opportunities to get SNES Classics were almost entirely consumed by scalpers. People were more or less limited to getting their console in person, and if they didn’t have a vendor nearby, they were out of luck. And then production stopped before everyone got their fill! As of this article, the SNES Classic is 270$ on Amazon. It launched at about 80$. Just like the NES Classic, it disappeared with no explanation and a steep drop-off into non-production.

Combined, the NES and SNES Classic just barely touched 10 million units, a tenth of what the Wii sold. It would have been more if more were available! The high prices on reseller sites should be a hint that more would have sold, if only the units were available, and yet Nintendo didn’t produce nearly enough to keep up with demand at any point during its run even with a perfect ‘test run’ in the unit before it.  Previous consoles should have acted as a warning – why didn’t they? Perhaps the Wii U really burnt them up on ever making even slightly too many of something.


The Wii U (2012)


Maybe it was always destined for failure. The Wii U was a more powerful console than the Wii, but marketing didn’t make it clear just how different it was. It might be funny to see the new designs that other console lines come up with, but they all look so distinct for a reason – the casual end-consumer needs to be able to distinguish the boxes by looks alone. Customers don’t like to read, and if grandma heard that her grandson wanted an Xbox 360, but the game shop still has the original Xbox in stock, Microsoft better plaster that 360 all over so she doesn’t get the wrong one. Different consoles need to look different.

Labelling and making each console very distinctively only helps sales and keeps customers satisfied. Meanwhile, the Wii U looked only very slightly different than the Wii. Customers saw the ads for the Wii U, but it’s unclear to them what’s actually different about it – is it a special edition of the Wii? Is it a software upgrade?

The name might have had something to do with it as well, but I don’t blame Nintendo for their naming conventions. Xbox jumped from Xbox to Xbox 360 instead of Xbox 2, so they had precedent, but everything else from design to the advertising of the console needed to be a hundred times clearer.

It’s ironic that this is the unit that hung around, the only one they’ve overproduced for in years. I don’t think this would have sold out at lightspeed like their other units did even if everything did go right. The CEO took a paycut (rather than cut employees) after it didn’t meet expectations, so that was nice, though.


The Wii (2006)


The Hot Commodity of 2006, the Wii indirectly caused at least one death by overhydration. It sold out across countries, and even outsold the PS3! It got difficult to find, sure, but it wasn’t impossible. Just very annoying. And yet, as many critics say, the timeline for production-to-sale makes their under-supply seem unintentional.

A few months with limited supply to keep the hype up makes sense. PS4 did that, PS5 did that, Xbox did that, etc. but a timeline of a few years? Consistently undersupplying for a few years? A little bit of over-demand is good, because it makes the indecisive buyer more likely to ‘get it while they can’. Too much for too long turns the console into a second priority to another company’s version. Wii was in the fortunate position of being one-of-a-kind, and so that hype never really died out. Substitutes just didn’t exist.

This was an incredibly unique time in console history. The market for the casual gamers was narrowing down to two or three consoles, and each has merit – but one is obviously very distinct. Those casual gamers were willing to wait a minute to get their hands on it. If it had been an Xbox clone, this would have blown sales.

They sold over 100 million units, and continue to sell on the reseller’s market even today.


The Switch (2017)


The Switch was different from the start. It was meant to compete with other, larger consoles, just like the Wiis, unlike the Classics. It advertised as a family console, like almost all of Nintendo’s consoles do, but it also innovated. The PSP is the first non-Nintendo handheld that comes to mind, and that’s obviously ancient. It sold well, and there were rough patches where supply was lower than demand, but it wasn’t months of waiting like it was for the Wii.

And then Covid-19 strikes, and the world shuts down. The Switch has already amassed several very good games – Breath of the Wild and Animal Crossing: New Horizons would have secured many purchases all by themselves, but new Mario games and assorted others only sealed the deal. It’s a really good console with a really good selection. Of course it sold out, people who wouldn’t have looked into it otherwise were now starved for entertainment, and the Switch provided.

Given the bump between the first peak of demand at launch and the second peak at the first lockdowns, it’s not surprising they sold out – who could have anticipated demand getting quite as high as it was during that year?


What’s happening?


Again, it’s difficult to say. The NES Classic and the Wii spent months out of stock, only for the Wii U to spend months at a discount because they overproduced after first launch. Each individual console has its own unique reasons for being out of stock or difficult to get.

Many of Nintendo’s successful consoles come during a time of industry upset. The Switch might not have gone missing for months if Covid hadn’t struck, and the Wii might not have sold so fast if it wasn’t literally the first commercially well-made console with motion sensing.

Ultimately, aside from ones where Nintendo literally stops all production, Nintendo consoles are undermade, yes, but artificially scarce? I don’t actually think so. I think they really do genuinely struggle with forecasting demand and organizing higher outputs. The consoles get to the shelves eventually, having a surplus of re-sellers taking all of the stock and reselling it hurts the consumer the most and Nintendo second-most. Customers complaining is surely getting back to Nintendo, and when a console takes a particularly bad ‘dip’, the one right after it generally has a better, more accessible supply.  Wii vs. Wii U, the NES Classic vs the SNES Classic.  I think Nintendo is focusing so hard on pure optimization top-to-bottom that they don’t allow for Wii U scenarios anymore – they’ve simply accepted negative reviews of their company based on quantity. Coming up short is, after all, much less costly than having too many units.