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In a statement to IGN on Thursday, Nintendo made waves by announcing the discontinuation of the NES Classic. The surprising announcement marked a fitting end for a disappointing product; a great concept perhaps held back by executives’ incompetence. Nintendo’s entire journey with the NES Classic is just the latest example of the gaming giant’s destructive talent for killing its own hype.

The idea driving the NES Classic was simple but brilliant. With the Wii U on the way out, and the mysterious NX readying for a March launch, Nintendo needed a hardware device to sell for the holidays. The NES Classic was the perfect fit. At $60, players could grab an easy to manufacture product featuring 30 (mostly) classic games in a perfectly nostalgic package. The appeal was clear. Young gamers had a great chance to go back and experience the roots of modern gaming, while older players could revisit their glory days. Even folks who hadn’t touched a controller since the 90s would be tempted to grab an NES Classic. If you’ve experienced nostalgia, you can understand why this product appealed to so many people. The idea is almost too good to be true. How could any company mess this up?

It took talent, hard work, and questionable design choices, but Nintendo managed to do just that. First, they crippled the industry buzz by creating a controller with a cord that can’t stretch over 2.5 feet. Then, they released about 10 consoles worldwide (I’m obviously exaggerating here). Finally, when it was clear they didn’t properly saturate the market, Nintendo never showed a sense of urgency in cleaning up their NES mess. While it’s difficult to comprehend how the NES Classic was so undervalued internally, everyone occasionally makes foolish mistakes. What’s less forgivable is the way the months following release were handled.

The notoriously tight-lipped Nintendo hesitated to announce their long-term manufacturing plans for the device. With scalpers selling the NES Classic for triple its market value, the Big N sat quietly. Coming out and giving concrete information on restocks would have gone a long way to ease consumer fears and lower black market prices, but that information never came. Occasionally, an erroneous tweet about restocks would be sent, but each time the quantity available failed to even threaten to match consumer demand. Eventually, the buzz surrounding the product died as frustrated consumers gave up on tracking down a market value NES Classic.

As a Nintendo fan, I want to believe that Nintendo simply terribly misread the market and didn’t have the time needed to appropriately restock the NES Classic. But blindly believing that would be ignorant, especially given the company’s history of creating artificial demand. In fact, Nintendo has a well-documented habit of intentionally creating artificial demand since the NES days.

The logic behind it is actually quite brilliant and founded on the gaming industry’s history. When Nintendo saved the gaming industry from The Video Game Crash of 1983, they wisely analyzed its causes. One of the biggest problems was an over saturation of the market. Games were easy to make, and it was difficult for consumers to recognize what games were good and which were bad. To prevent the market from flooding once again, Nintendo created strict rules for developers. They limited the number of games they could make each year and purposefully shipped less than the market demanded to keep the value high. That same theory applied to consoles: ship 80% of what the market demands and people will always be hungry for more Nintendo products.

It was a great idea that originated with less-than-sinister intentions. Gamers needed to be protected from burning themselves out, and Nintendo could keep turning a mind-blowing profit. Unfortunately, the plan falls apart when there are plenty of easier to access alternatives. With the NES Classic, parents who couldn’t find a unit for their kids could instead buy them a PS4 or Xbox One game at the same price. No headaches involved.

We experienced a similar situation with amiibo not too long ago, although the results were very different. Amiibo hunting became a fun (although frustrating at times) game for consumers who weren’t going to be able to take their money elsewhere even if they wanted to. This is because the product was unique. Although there were other toys-to-life figures, none had the quality or collectors value of amiibo. Although it took a long time, amiibo were also respectably restocked. The NES Classic, meanwhile, was a cheaply made product that never became readily available. Nintendo’s inability to recognize the foolishness of under-stocking the NES Classic cost them huge dollars as well as consumer goodwill.

super-mario-run-double-tap-jumpBeyond supply issues and poor communication, the NES Classic serves as another disturbing data point showcasing Nintendo’s fundamental disconnect with the average gamer. Let’s look at Super Mario Run, for example. Mario on mobile devices had the potential to be huge. Jimmy Fallon, the late night king, was gushing about it to the nation. Folks who hadn’t played Mario since the 80s finally had the chance to revisit gaming. Nintendo should have had a bigger hit on their hands.

Instead, they botched it thanks to a terrible pricing model. A fairly fun game was hidden behind a $10 paywall, and the little free content that was offered wasn’t nearly enough to tempt players to take such a plunge. It’s hard to understand how a company with the history that Nintendo has could fail to recognize that the $10 price point was way too high. Free-to-play games are what work on phones. The data was right in front of them, but they ignored it.

How about Star Fox Zero? It was another excellent idea, a traditional Star Fox game, held back by an obnoxious control system that nobody asked for. Motion controls wore out their welcome after Skyward Sword, but Nintendo insisted on shoving them down players’ throats six years later. The examples go on and on, and more are surely on the way (see the Voice Chat App for Switch).

Now please understand, I’m not questioning the wisdom of discontinuing the NES Classic. I don’t sit in the executive meetings, and I can’t see how much money they’re making off the thing. They’ve already sold over 1.5 million units, and that seems to be way more than internal estimates expected. Perhaps Nintendo needs to focus their manufacturing resources elsewhere. It’s definitely sad to see the device never get the treatment it deserved, but I can’t question the logic of discontinuing it now. As far as I can see, the interest in NES Classics is just about gone at this point, replaced by Switch fever.

Perhaps the most infuriating thing about the entire debacle that was the NES Classic is the fact that I’ve already forgiven Nintendo. It’s just so hard not to! Their products are (mostly) incredible, the NES Classic itself being no exception. As angry as I was at their poor communication, intentional under-stocking, and hype killing nature, I was first in line to pick up a Switch. Nintendo’s destructive habits hurt both consumers and themselves, but I’ve already forgiven them. And I could be wrong, but I bet most of you have too. Need proof? If they announced a SNES Classic tomorrow, would you buy one?

  • Tyler Kelbaugh

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Tyler has been a gamer since he was old enough to hold a control. When Sonic made his way over to GameCube, Tyler was forced to renounce his SEGA fanhood and fell in love with Nintendo. His favorite game series is the Fire Emblem series, and he’s a formidable Marth main in every Smash game. When he’s not gaming, you can usually find Tyler yelling at his TV watching a Red Sox or Sixers game.

Leave a comment below.

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  • I wrote about Super Mario Run a while back ( https://www.goombastomp.com/million-downloads-yet-super-mario-run-considered-flop/ ) and I don’t think it is at all a flop. Obviously, Nintendo could have made more money had they released it for free but they needed a game to test out that type of pricing and let’s be honest, Fire Emblem, Miiitomo and Animal Crossing wouldn’t do the trick. Mario is their biggest franchise and I think they made the right call. They still made a shit ton of money and now they know that in the future, a different pricing model might work better.

    As for the NES Classic – The only thing I really fault them for is the lack of communication to their fans and their choice to not offer any pre-order before Christmas. 1.5 millions units is a lot of machines and not other retro console has sold anywhere near that number. Yes, Nintendo does create a demand and as you pointed out in your article, this is an old marketing trick that works – but 1.5 million units of a retro console is still a lot. The problem for me was the scalpers and that isn’t Nintendo’s fault.

    They made a pure profit on the NES Classic and from a business point of view, that is a good thing. Right now they need to focus on the Switch and it’s hard enough juggling the 3DS as well.

    It sucks for those of us who couldn’t get our hands on the NES Classic but what can you do? You can’t always get what you want 😛

    • Tyler Kelbaugh

      While I wouldn’t call Super Mario Run literal financial flop, I do think it failed in its primary goal: Reignite interest in Mario/Nintendo with a wider audience. The people who bought Mario Run were mostly people like you and I. Gamers who wanted the luxury of Mario on their phones. Worse, they didn’t learn from the pricing mistake. They’ve recently said that Fire Emblem Heroes free-to-play model is still the exception, not the rule. It’s decisions like that that leave me scratching my head and my confidence wavering about Nintendo’s future decisions.

      And I agree, scalpers were a big problem. But they wouldn’t have been able to get away with it if the device was properly stocked. Moreover, Nintendo did have artificial ways to drive those prices down even with demand not being met. Laying out a clear plan for getting more NES Classics in stores before the holidays would have prevented parents from buying at that high price because they would have known it would be possible to get their kids the console by Christmas at market value.

      I’m with you there. As I said in the article, I don’t feel that discontinuing the NES Classic is the worst idea in the world. To me, I look back on it as another missed opportunity and a great example of Nintendo ruining its own buzz.

      • Put it this way. It still costs them money to produce and ship out the product. I’m sure they made plenty of profit from it but they will make more selling those same games on the virtual store at 5 – 10 bucks a pop, minus the manufacturing costs.

  • Pat Bellavance

    And yet… they still pull this crap. On the one hand, 1.5 million units might be a lot, but on the other it was PAINFULLY inadequate. I would love one. Before it came out, I decided I wanted to get one. The very limited release… holidays… and continued sold out stock meant I decided to wait a bit longer before trying (again) to get one at REASONABLE prices. Guess that won’t be happening. One can fault them for a lot more. There is CLEARLY a large demand (STILL) and the company has decided to turn their backs on customers allowing for for a scalping culture to continue. At the very least, they are taking away an alternative to piracy via the use of emulators and ROMs off the net

    • I’m pretty sure they have reasons for doing so that we don’t yet know about. Perhaps, they will release all of these games on the virtual store and make more money selling them all at $5 a piece. I don’t like it but they seem to be doing it for a specific reason.

  • Brent Middleton

    It seems like they’re focusing they’ve understood their mistake with the NES Classic and have decided to cut those losses and focus on making sure the same thing doesn’t happen to the Switch. So my guess is they’re turning those manufacturing resources to Switch production.

    They’ll also probably make way more on those games by selling them on the virtual console for like $5 each like Ricky said. Also, since their online service is featuring free monthly NES and SNES game rentals, it makes more sense to save those games for monthly highlights that way.

    All that said, I’m pretty disappointed–I really wanted one. And I wanted a SNES Classic. But that probably won’t happen now either.

    • Tyler Kelbaugh

      At this point that’s really the best thing they can do: prevent the same problem from happening again. They’re definitely doing a better job on the Switch in both restocking and communicating, so that’s a good sign.

      I wouldn’t discount a SNES Classic yet. The NES Classic revealed the demand for a retro console along those lines and Nintendo would have to be blind to ignore that buzz. Still, as I said in the article, they do have an incredible ability to overlook and misread some pretty obvious data!