No, History Isn't Repeating Itself With Nintendo's SNES Classic Pre-Order Debacle

Nintendo's supply chain management is really crazy, but might just work.

Welcome to Nintendo -- home of Mario, Link, and a supply management chain that can hardly meet demands. I love Nintendo, but the company definitely has some work to do when it comes to distribution of its products. It seems like we go through a supply/demand shortage almost every time that a new console, game, or Amiibo comes out. 

Flashback to about a year ago -- the NES Classic was coming out, and people were losing their minds. It was portable, simple, and very cute. At the great price of $60 (the standard price for a AAA game) you'd get a handful of nostalgic games. The perfect gift for the lapsed gamer in your life.  

When pre-orders came out, they were gone in seconds. Retail stores could not keep them in stock, and some managers even said they would only receive two units per store. Then the retro console was discontinued, with a few hundred thousand sold.

In the case of the NES Classic, supply definitely did not equal demand. Nintendo created demand for the miniature console, and they could not (or chose not to) meet it. It's possible that the company believed it would be a gimmick collectible and didn't realize people would actually want it. It's also possible that Nintendo knew full well how popular the console would be, and generated hype around a product they never intended to make widely available.

No matter what the true cause was, the whole debacle ultimately resulted in more unhappy fans than it did satisfied consumers, and made players wary of Nintendo's ability to meet demand for the products it marketed heavily. 

Enter the SNES Classic

Unless you've been living under a rock for the last several months, you probably know that Nintendo has announced yet another miniature version of a classic console -- the Super Nintendo Classic. It has been slated to come out September 29, 2017 (just over a month from now). But so far, the only information Nintendo has given is the following statement on its Facebook page:

"We appreciate the incredible anticipation that exists for the Super Nintendo Entertainment System: Super NES Classic Edition system, and can confirm that it will be made available for pre-order by various retailers late this month [August]. A significant amount of additional systems will be shipped to stores for launch day, and throughout the balance of the calendar year."

As soon as pre-order was announced, the warning bells began to toll for many on the internet. And everyone was wondering....would Nintendo actually be able to meet consumer demand this time around, or would we see a repeat of the NES Classic drought?

Unfortunately, fans got more of the same from the Big N.

Even though Nintendo assured us that there would be significantly more SNES Classic units made than the NES Classic...that doesn't actually seem to be the case. Store are still sold out everywhere, and supplies still seem to be far more limited than the demand that Nintendo is surely aware of by now.

Because of this, fans like myself are really starting to wonder whether it's true that Nintendo is faking its limited supplies. But if we take the time and really crunch the numbers, it starts to look less like a shady business practice and more like a pragmatic way of testing the waters before investing fully in a product.

This sort of behavior was understandable when it came to a unique flagship console like the Nintendo Switch. The company couldn't afford to overproduce this machine on its first run, because that would cost a significant amount of money. If each unit costs around $257 to make, making a 10 million units to sell would run somewhere around $2.5 billion. And misjudging the demand when you're forking over that kind of production cost can be devastating -- even missing the mark by a million units could lose the company nearly $300 million in revenue. 

At the end of the day, Nintendo isn't a parent that has to provide us with everything we ask for. It's a company that has a bottom line to meet, shareholders and profits to keep in mind, and a business plan that simply cannot make every fan happy.  Unfortunately for those of us who really want to get our hands on these products, it seems like part of the Big N's plan is to limit its production until there's real proof that a product will sell at the rate it needs to. 

Maybe Nintendo Isn't Crazy or Careless At All

It's certainly possible that Nintendo is just pulling the wool over our eyes in an effort to make itself look better to investors. But really, it seems more and more like the company is just trying to protect itself by not over-producing anything that isn't guaranteed to fly off shelves.

The NES Classic was a dumb mistake on Nintendo's part -- a case where it greatly underestimated demand and didn't create nearly enough supply. The company thought it was just a gimmick, but it turned out to be an extremely sought-after product that had tons of nostalgic value. Though this doesn't quite explain the decision to discontinue the NES Classic after its first run, at least it looks like Nintendo is sort of learning from its mistakes. 

When the SNES Classic arrives in fuller force, hopefully we'll see a second and third run of it to serve those fans who really want to get their hands on this revamped piece of their childhoods. We've created another wave of demand this time around, and now it's up to Nintendo to meet that demand with a real supply that will do right by its fans. In the end, it'll be a smart business move that'll raise their bottom line. 

The SNES Classic Edition goes on sale on September 29, and it costs $79.99...if you can get your hands on one. 

Published Aug. 27th 2017

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