Nintendo and the NES Classic Edition

I cannot decide if Nintendo is stubborn, crazy, or just knows something we all don’t.

Yesterday’s “WTF Nintendo!” news was that they were killing off the NES Classic Edition console.

NES Nostalgia for only $60… if you can find one

If you have tried buying one of these consoles in the fives months that they have been for sale… well, you’re probably at least a bit angry.  They have been selling out like crazy and the short supply has led to speculators snapping up all they can find to resell them for 3x or more their list price on the gray market.

As a company, what do you do when you have a product that is so popular that you cannot keep it on store shelves?  At a minimum you keep producing it to exploit that demand.  Maybe you even refine the product or make some minor addition that allows you to charge more for it.  I mean, how many variations of Atari 2600 classic consoles and game packs for various platforms have there been over the years?  Atari has been milking that nearly 40 year old cow for at least 30 past its peak.

While I am not at all in the classic Nintendo fan club… I was on my third or fourth computer by the time the NES came to the US… this sort of nostalgia console and how it plays in the market still grabs my attention.  I figured it was popular enough to have a nice long run.

But Nintendo cancelled it, with this statement going out to the Americas market:

Throughout April, NOA territories will receive the last shipments of Nintendo Entertainment System: NES Classic Edition systems for this year. We encourage anyone interested in obtaining this system to check with retail outlets regarding availability. We understand that it has been difficult for many consumers to find a system, and for that we apologize. We have paid close attention to consumer feedback, and we greatly appreciate the incredible level of consumer interest and support for this product.

I do not understand.

I have seen a number of theories as to why Nintendo has cancelled the NES Classic console.  They include:

  1. It isn’t profitable, or profitable enough
  2. Licensing issue with one of the non-Nintendo games
  3. It is taking attention/resources/shelf space from the Switch
  4. More profitable to sell these games a la carte on Virtual Console
  5. The fact that it can be hacked for other uses
  6. They have something else planned (SNES Classic?)
  7. Some other Nintendo reason we cannot imagine

The reason could be any one of those, some combination of them, or some reason not on the list including, as Ars Technica put it, Nintendo hates money.

When I think of Nintendo, three different things come to mind.

Nostalgia farmers – They have worked and re-worked Zelda, Metroid, Pokemon, and, above all else, Mario for decades now.  You buy Nintendo hardware to play these franchises.

Hardware focused – As somebody who has worked for hardware companies before, from the outside at least they betray all the signs of a firm that measures it value in terms of hardware units shipped.  It was a huge break with tradition for Mario and Pokemon to appear on smart phones.

Bad at Forecasting – Having demand exceed supply is a good problem, but only if you handle it well.  And Nintendo has had the reverse problem as well.

Odd Man Out – In the console wars if often seems like Sony and Microsoft are battling each other while Nintendo is over in the corner wondering what Mario should do next, unaware that it has competitors.

Unfortunately, these characteristics can be mixed and matched to come up with almost any of the suggested reasons for why Nintendo decided it was time to cancel the NES Classic Edition.

Why do you think Nintendo made this move?

11 thoughts on “Nintendo and the NES Classic Edition

  1. Bhagpuss

    Is it actually cancelled? The quote says “Throughout April, NOA territories will receive the last shipments of Nintendo Entertainment System: NES Classic Edition systems for this year.” That doesn’t say there won’t be further shipments in 2018 and beyond.

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  2. Wilhelm Arcturus Post author

    @Bhagpuss – Yes, that quote, by itself, is misleading. But it was the follow up to the cancellation announcement and, to me, just adds to the confusion over why they are ceasing production.

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  3. Wilhelm Arcturus Post author

    @Lorelei Ierendi – Adding on, the more I think about it, the less I agree with that link stating that licensing issues are the most likely reason to stop production.

    The thing is, the 3rd party games in question are 25-30 years old, locked into NES or NES emulation on things like Nintendo’s Virtual Console, and to get onto anybody’s proprietary console… and Nintendo’s especially… you have to hand over some of your rights to the console owner.

    Basically, these games represent a bunch of code that the developers cannot profit from unless Nintendo sells some copies. Yes Bandai Namco, for example, can make money elsewhere on Pac-Man, but the NES code is just sitting there unless Nintendo sells it. That is money not being made if they stop Nintendo.

    So for this to be a pure licensing issue would require Nintendo to be breaking some contractual obligation and not making good on it or the third parties shooting themselves in the foot. Not an impossible scenario… and it gets more likely is other items on the list come into play… but not, to my mind, the top candidate because shutting down production means nobody makes money.

    My own favorite theory is that Nintendo was as surprised at the demand as they have said in other statements and that Virtual Console conversions of NES titles will suddenly become a priority feature for the Switch, because Nintendo is Nintendo and they want to sell their latest generation hardware more than anything else.

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  4. Urtidig

    Because you order production lines in advance and right now they are busy building Apples upcoming mixreality glasses.

    Crazy and probably not true, but you asked.

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  5. Krumm

    Its a case of this truly not understanding their market segments, nor the consumers that exist within them. The switch which is their current marketed product is trying to branch back into the serious gaming machine market… after their two previous failures to gain market share in the industry outside of the hand held. They are the lions share of hand held and yet they do not understand that the retro gamers that are buying the classic are not going to impact their switch sales volume meaningfully. It is one thing to see a product and say oh wow memories from my past all in one package for a decent price versus a restricted market to those that have aces to a virtual marketplace and have to decide wheater to buy a new game or a retro game from 30 years ago.

    They are limiting themselves because if they where smart they could come out with a nes with retro cartridges and people would buy them hand over fist because a actual final fantasy Cartridge goes for some hundred dollars right now.

    Ahh if the smart people with common sense ruled the world…

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  6. .xyd

    “It is taking attention/resources/shelf space from the Switch”
    Yeah, because the shelves are just brimming with inventory. *snort*

    “More profitable to sell these games a la carte on Virtual Console”
    I’m going with a combo of your fave reason and this one. I think they want to drive Switch revenue (my kingdom for a Switch) and driving these via virtual console to the Switch platform makes sense.

    Nintendo NES Classic Controller for Switch (with a really short cable for that real vintage feel) FTW.

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