Nintendo’s NES Classic Edition is a fascinating case study in marketing. Since Nintendo announced the console in November, they’ve sold almost a million of them in North America, all while maintaining a constant shortage, creating a demand frenzy. Given the simplicity of the product itself (it’s a retro product, no cutting edge parts), I’ve always seen that shortage as artificial.
As we reported Friday, Nintendo has now pulled the plug on the NES Classic, announcing that the last run will ship in April. Nintendo has a successful product, was basically printing money, and they walked away from that particular business.
The question is, why?
From ZDNet:
Whether scarce by a lack of foresight as Nintendo explains or intentional scarcity as history suggests, the Classic served as a distraction from the company’s near-term bet, the Switch, and its long-term bet, smartphone games. Those two endeavors have something the Classic lacked, the potential for monetization far beyond the initial transaction. Simply put, the Classic provided too much value to consumers, even at inflated prices offered by profiteers.
Simply put, there was no way for Nintendo to leverage the Classic to build a self sustaining business beyond the simple (and dollar wise, small) business it represented. And The Classic was funneling some amount of attention and mindshare away from the Switch and Mario Run.
Another wrinkle from this Bloomberg article, quoting a CitiGroup analyst:
“Although the Nintendo Switch can be used as a handheld device, we think smaller children could struggle to use it comfortably in that format due to its size and weight,” the analysts wrote in a April 13 report. “Accordingly, we think Nintendo will launch a lighter, dedicated handheld version of the Switch, possibly to be called the Switch Mini.”
The NES Classic does not fit into this picture, but the intellectual property it represents certainly does. I suspect we’ll see those classic games (especially that key Zelda title) emerge as purchasable, downloadable content on both the Switch and the Switch Mini, bringing in far more money than the existing Classic could even dream of.
Kevin Fox phrased it succinctly: https://twitter.com/kfury/status/852681401153368064
xpost from an article on Polygon:
Ultimately all of the conspiracy theories about why they killed the NESC miss maybe the most obvious one: Nintendo is stubborn and kind of dumb. We saw this as an ingenious product that, once properly stocked, be a great impulse buy for people that grew up with the NES but don’t necessarily play many video games anymore. Nintendo never planned it as such. They wanted a stopgap product for the holiday season to carry them until they got the Switch.
When the NES Classic exploded, Nintendo should have quickly realized that there was a large untapped market for such a device that they had found. But Nintendo is stubborn and kind of dumb. Once the Switch arrived, they wrapped up the NES Classic as planned. The people in charge either didn’t realize that this could be a device for people that won’t buy a Switch, or were just so religiously stuck to The Plan that it didn’t matter.
I imagine Nintendo will have a successor to the NES Classic, that will tie into Nintendo’s expected subscription service for the Virtual Console. It might have been poor planning releasing the product at all, but not pulling it (if its for that reason). Either way, it got Nintendo much needed buzz and publicity when the WiiU was a dying system.
We will see.
Last week a got a text asking how my Switch was, as my friends, a young couple, were out and about and thinking of picking one up. I gave it a glowing review. A couple of days later I asked where they landed on the decision and they reported back that they’d bought a NES Classic. It’s one case, but there has to be some element of the Classic eating the Swicthes lunch in play.
When it was released, gamers lamented that the controllers cord was too short. They complained that it only had 30 games. And not even the best 30 games. They rubbished the fact that you couldn’t add titles yourself via USB or SD. They gnashed their teeth at how locked down the OS was.
Now the system is being pulled and they are up in arms!
I think the term “entitled gamers” applies.