The Nintendo Problem

Greets once again, boys and girls.  Now, if you’ve spent any time around here at all, you know that I’ve been a huge fan of games for longer than most of you have probably been alive – and if you count starting ACTUAL wars as “war games” then for CENTURIES longer than you’ve been alive.  And in all that time, I can honestly say one thing – I’ve never, ever, EVER fallen prey to the fanboy console wars.  I’ve played every single home console available since the Atari 2600, and most of them at some point as well.  Each one has had their strong suits and weak points, and I’ve enjoyed them all to one degree or another.  So this is not an attack on Nintendo as a console maker or game developer – I dearly love Nintendo and all of the many memories it has given me.

Nor is this an attack in on the Nintendo Switch hardware itself, or it’s killer app, The Legend of Zelda: Breath of the Wild.  I’ve spent a considerable amount of time playing it courtesy of a friend, and I can say that the Switch itself more than lives up to its billing as a true merging of home console power with portable gaming convenience, and BotW is not just one of the finest Zelda games, or open world games, I’ve ever played, but simply one of the most beautiful and masterfully crafted video games of all time.

zelda-breath-wild

No, my gripe today is with Nintendo as a company, as a business entity.  This is not sour grapes because I am playing BotW on my friend’s Switch rather than on one of my own – rather, it’s the reason behind why that is.  Nintendo has made a disturbing habit over the several console generations of intentional, manufactured hardware shortages – as a business and marketing strategy – and I feel that the time has finally arrived for them to overcome their stubborn pride and admit it for the costly long-term mistake that it is.

Let’s face it – ever since the days of the Gamecube, Nintendo has made no secret of the fact that they have not even tried to stay on the bleeding edge of console hardware capability.  Instead, they have focused on two other things – innovation and marketing.  As with all things in life, they’ve experienced some tremendous successes as well as some setbacks.  There can be no argument that the Wii was a tremendously successful piece of console hardware, nor that the Wii U that followed failed to recapture that success.  But neither device was in any way a high-powered gaming console when compared to its contemporaries.  And yet, the launch of both consoles – and in the case of the Wii U, throughout its life cycle – were marked by a virtual absence from store shelves, with units arriving in minuscule trickles, snapped up within moments, and with never any real idea of when the next may arrive.

These shortages could be nothing short of intentional.  The simple fact is that the components required to manufacture those consoles was not difficult to fabricate nor to acquire.  There was literally no viable reason why Nintendo couldn’t produce significantly more product than they did – which means that they simply chose not to.  Now, there are reasons why a company may do this.  If they are unsure as to what the market demand for their product will be, it is often wise to reduce the quantity of the initial product run while running an aggressive marketing campaign.  This has the effect to stoke market appetite, and then to drive it even further by making the product seem artificially more desirable by virtue of scarcity.  With a paradigm-shifting console like the Wii, which was the true advent of mass market motion-controlled gaming, this approach made some sense, as even with focus testing and aggressive marketing, Nintendo couldn’t be positive that this radically different experience would be universally received well.

Such is not the case with the Switch.  The Switch is less a revolution, an more of an evolution.  It represents the culmination of what gamers have dreamed of for years – a true hybrid of home and portable gaming.  But while this is a fantastic achievement, it was done utilizing fairly pedestrian technical specs.  The Switch is essentially a tablet with a charging dock – none of which is even remotely new technology.  And Nintendo’s Switch marketing blitz did an absolutely phenomenal job of priming the market for the console’s debut – so why the market shortages?  This wasn’t a gimmicky flash-in-the-pan longshot, it was a traditional home console/traditional portable hybrid, with an absolutely killer launch game in BotW.  Nintendo knew this.  And they knew that the aftermarket sales – the Switch’s thrown onto ebay for 2x-3x the retail value – didn’t benefit them in any way.  So in the end, Nintendo’s entrenched policy of intentional hardware shortages, and their stubborn corporate pride in refusing to admit the mistake, as shown with the NES Classic, is resulting not in additional hype, but in a very real and dangerous chance of loss of consumer goodwill.  Let’s face it – this was not a holiday counsel launch.  There are not going to be customers lined up day after day, parents trolling auction sites willing to pay hundreds of dollars above retail so that they can see their kids smiling on Christmas morning.  This was a March launch, and with only one physical game on store shelves that was a must-play.  Sure there are some other fantastic launch games – I Am Setsuna and Shovel Knight come to mind – but those are both digital releases and both available on other platforms.  And BotW, for that matter, is as well – any Wii U owner could play it without finding a Switch.  So rather than setting the stage for a bright Nintendo future, instead this could backfire – customers could quickly grow tired of searching stores and websites for one of the few Switch’s that Nintendo deigns to send to market, and decide that they simply don’t need it.  And Nintendo simply cannot afford that.  After the flop of the Wii U, they need every single person who is inclined to buy a Switch to be ABLE TO BUY A SWITCH.  If that means deviating from previous strategy, they need to do so.

After all, Nintendo was once a playing card and toy company, and they deviated wildly from their traditional strategy and took a major chance on a completely untamed market.  You may know that chance as the NES. – EWE

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14 thoughts on “The Nintendo Problem”

  1. Nintendo is typically conservative when it comes to many releases, whether it be console, mini consoles, or amiibo. I’m not surprised that it sold out, both because of the Switch’s bigger hype than the Wii U and because of Nintendo’s conservatism. I can’t speak for what went on in Switch production, so I can’t say why exactly they didn’t make more knowing it would be popular. But I think that by the time pre-orders went up for it, it was too late to produce more in time for launch. The units they produced afterwards will probably comprise the next shipment. Great insights though!

    Liked by 1 person

    1. I don’t disagree about them being historically conservative. My issue is more on that historic conservatism holding them back. I feel for them because I understand how hard it is to take risk within the Japanese business and corporate culture, but the biggest successes they’ve had was when they deviated from their established practices and took risks. I just think that the writing was all their for them to read well enough in advance (from the moment that they announced it was a console/portable hybrid they could see what a hit they had on their hands) and they just couldn’t make themselves pull the trigger. Will it stop people like me from buying one eventually? No, but I was going to anyway. I’m not the undecided consumer. But the true on-the-fence consumer is not going to wait two, three, four months patiently for a Switch – they will move on to something else, and by the time that a Switch is finally on store shelves, the expendable income they would have spent in it will have gone to other entertainment options. It’s not that I don’t like Nintendo or the Switch – just the opposite. I love both and want to see them succeed, and it irritates me to no end to see them shoot themselves in the foot in an avoidable way.

      Liked by 1 person

      1. Definitely agree that they should have had more at launch. But ideally Nintendo should strive to make the Switch something people want regardless of time frame. Their goal should be to make the system as desirable as possible later just as much as launch. Sure, they can get more on-the-fence consumers. But they did with the Wii and many ended up letting it collect dust for years. There’s more of an uphill battle with keeping the system relevant even after getting it in stock.

        Liked by 1 person

  2. Great post! When people ask me what the Switch is like, my answer is an awesome Nintendo tablet. The only reason I got one on launch day was because I managed to sneak in a preorder on a work break, weeks ago. It took me months to get a Wii, and I’m still on the lookout for an NES Classic. I also remember dealing with horrible stock issues during the dark early days of Amiibo collecting. If it’s a new Nintendo product, you can almost guarantee there will be a stock shortage. The only people this benefits is those greedy reseller people. It’s getting annoying but I still love big Nintendo. Childhood nostalgia is a powerful thing!

    Liked by 2 people

    1. I completely agree! I love Big N as well – both from a childhood nostalgia perspective and because they are just an amazing game company – but I feel like I love them enough to want them to succeed beyond what they have and they are shooting themselves in the foot. They started these “shortages” around the era of the NES and Game Boy – but lets face it, who was their competition then? There really was none. Now, every day or week that goes by without a Switch on shelves is a chance for casual consumers to spend that cash elsewhere and there are a TON of different choices for them. Nintendo doesn’t need to worry about you or me – we are buying one regardless. But the fact that you STILL can’t find a NES Classic anywhere, the fact that nobody knows when a Switch may be available…those aren’t concepts that work in the modern market. It fosters ill will and clashes with the modern consumer desire for instant gratification – and in the end it’s only Nintendo, and we gamers that support them, that lose.

      Liked by 1 person

  3. A tablet with a charging station is a fantastic definition of it, and really solidifies your point about the Switch being the culmination of numerous factors and not a wholly new innovation in and of itself.

    I’ve always wavered between two schools of thought on why the hell Nintendo never had enough hardware stock not only upon new release but for YEARS afterwards. The Wii remained scarce for up to two years after it came out. I was 75% certain they were doing it on purpose, but 25% trying to give them the benefit of the doubt. I want to say other consoles are manufactured in China, which has the infrastructure and set up for such an industry, but Nintendo plays its manufacturing cards close to hand (or so I’ve been told/assumed) and they make them in Japan, which is much smaller than China without the assumed ability to have as large of industry. But now you’re saying this isn’t true, proving that my 75% was the right percentage. It’s the idea of keeping a low supply to drive high demand, but it’s annoying as hell. I also recently heard that Nintendo HATES having stock sit on the shelf for any period of time, which I get, but don’t, because it’s not like it’s not going to sell. #rantover (for now).

    I was console war whore when I was younger (ah my sinful youth), but now that I’m old(er), I realize how juvenile and ridiculous it was (some people still haven’t grown out of this phase…) I was Nintendo all the way, but now I regret what I missed out on with Sega.

    Liked by 1 person

  4. Honestly, I don’t think Nintendo expected it to sell so well. Even I thought them setting the sales target at 2 million units for the month of March alone was pretty high. After the failure of the WiiU, 2 million in a month would have already been 1/5 of what that system sold in 5 years. That said, they’ve just announced that they’re doubling their production in 2016 from 8 to 16 million systems, so there should definitely be more than enough.

    And if they somehow still have shortages this year after that, then I guess that’s a problem they can solve while swimming in their money Scrooge McDuck style.

    Liked by 1 person

    1. Oh I am not here to say that Nintendo is going to go under – I just can’t stand them settling for being an also-ran when it’s entirely due to their own self-defeating culture. If they weren’t expecting it to sell this well, they were paying no attention to the industry hype and preorder numbers. The WiiU definitely did flop – but this wasn’t the WiiU. This wasn’t a slightly better Wii (which most people had) that you controlled with a strange tablet thing. This was something that the industry had been after for years – a true merging of a home and portable console. The only things that might have held it back were either issues with the hardware working properly (in which case push back the release and fix it) or lack of software (jury is still out, but Zelda was a killer enough app to sell launch systems). The bottom line is that if this were 1985 and there were no other competing consoles, this strategy might be ok. Or if this were a holiday launch and parents were willing to move heaven and earth to make sure their kids woke up to the Switch under the tree, it might be ok. But this is a March launch in a market where competition is incredibly fierce. The $300 that the average consumer is BEGGING to give Nintendo for a Switch can be very easily spent on other systems or games, right now. And we live in an immediate gratification society. So telling consumers “don’t worry, we will get around to taking your money in six months or so” is just asking them to go spend it somewhere else. Do those folks want to play Zelda? Sure, but since they can’t right now, they’ll find something else on PS4 or Xbox One to play, and now Nintendo is faced with having to REINTEREST them into buying a Switch at some later date. The writing was on the wall that they could have doubled or tripled the launch install base, and they quite simply blew it. Their problem isn’t me – I’m going to buy one regardless of when it comes back in stock. But I’m not their target. They want the average, non-hardcore consumer – and those people aren’t going to just sit on their money indefinitely and wait for Nintendo to decide that it’s ok to have product sitting on a shelf for more than ten seconds.

      Liked by 1 person

      1. Yeah, that’s true and very valid points. I know some of the stores near me have since gotten more stock and Gamespot is saying there will be new shipments soon, so hopefully Nintendo can keep the hype lit. As much of a system seller BotW was, they’ve got to have a comfortable supply come Mario Kart 8, because that’s the game that the casuals will no doubt hop onto having missed the WiiU version.

        Liked by 1 person

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