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Nintendo’s Baffling Stock Issues Are the Worst Kind of Nostalgia

The classic gaming company refuses to learn supply and demand

(Getty Images/Ringer illustration)
(Getty Images/Ringer illustration)

Richard Skelhorn assumed, at some point, he’d easily be able to get his hands on an NES Classic. The 34-year-old finance director from Hay River, Canada, was excited about Nintendo’s miniaturized revival of its first industry-defining home console. He specifically wanted to school his children in Super Mario Bros. 3. “My kids always want me to play [new] video games with them, but I don’t know how to play them,” he says. “I feel like an old man trying to figure out a VCR. But I think I can definitely kick their ass playing the old Nintendo ones.”

But when Skelhorn tried to buy the device online from retailers like Best Buy and Target earlier this month, he realized the highly sought-after console was constantly out of stock, even half a year after going on sale. That’s when he discovered that Nintendo was unceremoniously ceasing production on the NES Classic, even though there was still a huge demand for it in North America. Ultimately, Skelhorn bought the device for $340 Canadian (about $250) on eBay, $260 Canadian more than the console’s suggested retail price. “It almost seems like the people who legitimately would use it, guys like me, aren’t gonna be able to pay MSRP for it,” he says. “It almost seems like Nintendo is making this environment that appeases scalpers and screws guys like me.”

In the last couple of years, buying Nintendo products has turned into a real-world fetch quest of the most frustrating sort. Amiibo, the company’s popular line of electronic action figures, are tough enough to track down that collectors have taken to drafting rarity guides. The 3DS, which has been on the market for years, was bizarrely difficult to purchase as recently as February. And finding a store that has the company’s latest console, the Switch, on shelves feels a little too much like hunting an elusive Snorlax in Pokémon Go.

Strong sales are good news for Nintendo, a company that always feels like it’s one big mistake away from total obsolescence. But if you’re a gamer who expects a major industry player to make its products readily available in this modern era of digital convenience, you’re probably annoyed that the company’s distribution strategy has become a perpetual game of cat-and-mouse. My colleague Jason Concepcion captured the appropriate reaction to any new Nintendo product announcement with this concise assessment: “Nintendo’s business model is a scam but also I want this.”

The least charitable view of Nintendo’s stock issues, and the one that lends itself best to the conspiratorial nature of the internet, is that the company purposefully constrains stock to drive attention toward its seemingly “must-have” products. The NES Classic was tough to preorder before it launched in November, nearly impossible to buy online once it was out, and available in limited quantities in physical stores. The product was popular — 1.5 million were sold globally in the first three months — but its popularity was easy to predict and well within the scope of typical hot holiday gadgets. “I’m less surprised at the lack of supply than I am at their decision not to ramp up production and satisfy demand,” says Michael Pachter, a research analyst at Wedbush Securities. “I don’t think that’s a smart consumer move. I still want one, and I don’t have one, and I’m not gonna go pay 500 bucks on eBay for it.”

It’s unclear exactly why Nintendo canceled the successful NES Classic when it’s still trying to convince investors it’s not a doomed business. My bet? The company plans to sell its old games on the Switch’s online store (as it has on many previous consoles), and hopes they’ll be alluring bait to bring old-school gamers back into the Nintendo fold. Offering up a cheaper alternative to scratch people’s nostalgia itch does Nintendo few favors in the long run, and the company has said repeatedly that its experiments in mobile gaming and other avenues are meant to drive sales of its flagship hardware and software. The NES Classic was probably always meant to be more about boosting Nintendo’s mindshare than lifting the company’s bottom line. (Nintendo declined to comment for this article.)

The situation with the Switch is more complex. The company produced 2 million units to sell in the first month globally and had plans to make 8 million more over the course of the next year. Those are relatively modest figures, but they make sense for the followup to the Wii U, a hot mess of a console that probably had even Sega wincing. “They had the most successful Nintendo console of all time with the Wii, followed by the least successful Nintendo console of all time with the Wii U,” Pachter says. “I understand their caution with the Switch.”

But the Switch — despite having an anemic software lineup — appears to be a bona fide hit. The console sold 906,000 in the United States in March, the second-biggest launch for any gaming system in the U.S. since 1995. The key was The Legend of Zelda: Breath of the Wild, a launch title that cleverly melds the same nostalgic draw of the NES Classic with “best game ever” hype over Nintendo’s innovative contributions to open-world game design. If Nintendo has spawned a new gaming craze with the Switch — they tend to rattle off at least one per decade — it’s hard to blame the company too much for stock problems. Based on the successful launch, Nintendo is now planning to double Switch production for the year, so the device should either be relatively easy to find this summer, or it’s about to hook your grandma/cousin/fourth-grade teacher the way the Wii did.

Of course, there are plenty of tech companies with best-selling products that don’t require their fans to go on scavenger hunts across big-box retailers. The PS4 has been a roaring success, but you can still easily find it in stores. Same (usually) for the iPhone. Nintendo, at its core, seems confused about whether it wants to be a boutique toymaker that sells nostalgia-tinged gadgets or a modern consumer electronics firm that can stand toe-to-toe with Sony and Microsoft.

For now the company seems intent on proving it can be both. Nintendo’s president has predicted that the Switch can be as successful as the Wii, which would require selling more than 100 million units and likely an even more aggressive production run for the new console. At the same time the company is now rumored to be planning an SNES Classic for this holiday season. If the new retro console has the same distribution problems as last holiday’s model, will people revolt against Nintendo? Somehow I doubt it. Skelhorn said he’d probably line up for an SNES Classic even faster to make sure he gets one. “I almost feel like I would buy a couple of them if I could at manufacturer’s price just in case a colleague or friend of mine had issues buying one,” he told me. As much as Nintendo’s anticonsumer policies frustrate me, if its next Classic device includes Chrono Trigger, I’ll probably be in line with him.