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.