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Nintendo and their fabricated hardware shortages

qko

Member
I watched the presentation, went to sleep and when I got up preorders were gone.


I could not get a preorder. I'm sure many couldn't

i know a friend missed out on Best Buy preorders that night, but he got one at a GameStop the next morning.

Nintendo has said there will be Two million sold WW by the end of March. There are rumors there is another million already produced as reserve stock.

Launch hype can be dangerous since many scalpers try to buy a lot, sell online, and return what doesn't sell before whatever 30 day policy runs out. The Wii U got burned by this pretty bad.
 

Rncewind

Member
If you've got a monopoly? Sure. Think the diamond industry. There's academic study about patent laws being a form of artificial shortages. But creating a non-luxury product intended for mass retail consumption in a competitive market and intentionally limiting your sales for word of mouth and press is frankly absurd.

You want word of mouth? Get the product into people's hands.

It is most common in the luxus segment but not exclusive to it

For example, i know for a fact that Nintendo, back in the NES/SNES days did this and only handed out a very limited, expensive, quantity to retailers, to profit from it

edit: that what @The Albatross wrote basicly
 
east coast gamestop 929 area code 45 preorders allowed total no units outside of preorders currently. In comparison we had over 100 xb1 day 1 preorders and never hit a point where we couldn't take a preorder.

That honestly sounds like XB1s were overshipped, rather than Switch's being undershipped when you say they never sold out of preorders. Keep in mind this is also March, rather than November.

Anyway, nothing about this sounds artificial/fabricated. It honestly appears that Nintendo just isn't expecting much more demand for the launch period than 2 million units. We'll see (hopefully) at their next investor briefing what their forecasts for FY17 overall are.
 

RibMan

Member
I haven't seen this discussed and was simply wondering if it was acceptable because this is a Nintendo thing. I checked to make sure it wasn't just gamestop and it isn't, several other retailers are reporting the same thing. Nintendo is only allowing an extremely limited number of preorders for the switch system and it doesn't currently look like we will be receiving any additional units outside of preorders. Either they aren't expecting it to do well outside of their hardcore fan base or they are with holding units to manufacture demand. Either way I'm not sure it's a good move on their part.

There's a great video by Jim Sterling where he talks about Nintendo employing the tactics of toymakers to increase demand and overall brand value. I encourage you to watch it, as it helps in explaining why the company has consistently failed to meet hardware demand: https://www.youtube.com/watch?v=cRicuKHmjZA
 
Look what happened when they made a shit ton of wii u consoles and they were snatched up by scalpers who couldn't get anything for them and then returned them all burdening Nintendo with negative sales numbers in the second month. It'd be suicide to let that happen again.
 
Yep. This is not how business works.



Except that retail orders don't work this way anymore. Retailers don't pay for product until after delivery (usually 30, 60, or 90 days after delivery).

Well, yes, I was describing what they did in the 80s and 90s, and why Nintendo is seemingly the only consumer electronics maker in the world who consistently cannot meet demand for their popular products. Just about every other device manufacturer has figured this out over the last 30 years. Nintendo is the only successful device manufacturer that cannot. Apple comes close when they release a new iPhone, but even Apple meets demand far better than Nintendo does, and Apple has real demand for their products which are more complex and much more difficult to produce (Apple will sell more iPhones in a weekend than Nintendo will sell consoles over 5 years).
 
Also have to consider there's likely a significant amount of people with multiple preorders trying to flip em on ebay.

I know a guy got 8 Switch's preordered. Will have one for himself and sell the other 7 on ebay day one.
 

LordKasual

Banned
There's no benefit to Nintendo as a company creating sales scarcity. They want to sell as much as possible but they are playing it safe so the numbers look good for investors.

It's more important NOW than it's probably ever been in their history. The newer consoles don't offer much of anything in comparison to the competition anymore, save for first party titles.

Selling the narrative that their console is SO innovative and resonates SO well with the consumer is something that would drive an otherwise uninterested person to want to "jump on the bandwagon", so to speak.

Not to mention the loyalists who will defend the claim and support the system no matter how mediocre it is. It's essentially just good PR to craft an image of your product being so amazing that it requires camping at midnight to own one. It artificially raises its value.

And if all these rumors about the hardware shortcomings of the Switch are true, then they need lots and lots of artificial value.
 
Well, yes, I was describing what they did in the 80s and 90s, and why Nintendo is seemingly the only consumer electronics maker in the world who consistently cannot meet demand for their popular products.

Apple has the best supply chain management in the world, and consistently has issues meeting demand when they launch new (obscenely high profit margin) products.

Sony has been unable to meet PSVR demand. MS struggled to meet demand for their Elite controller.

Scarcity happens in every category of retail these days. Blame the modern supply chain systems of Just-In-Time production and distribution.
 

New002

Member
At this point it's either intentiontional because they like to play it super safe (more likely) or because they like to build hype and demand this way (less likely)...Or they simply suck at forecasting sales.
 

border

Member
Well, yes, I was describing what they did in the 80s and 90s, and why Nintendo is seemingly the only consumer electronics maker in the world who consistently cannot meet demand for their popular products. Just about every other device manufacturer has figured this out over the last 30 years. Nintendo is the only successful device manufacturer that cannot. Apple comes close when they release a new iPhone, but even Apple meets demand far better than Nintendo does, and Apple has real demand for their products.

Except that PS4 and Xbox One also couldn't meet launch demand, and the PS4 camera and Elite controller also experienced supply problems. Apple is severely constrained on AirPods at the moment too.

Funny to see these people spinning dumb conspiracies when like the WiiU, the Switch will probably be readily available within a few weeks of launch.
 
Well, yes, I was describing what they did in the 80s and 90s, and why Nintendo is seemingly the only consumer electronics maker in the world who consistently cannot meet demand for their popular products. Just about every other device manufacturer has figured this out over the last 30 years. Nintendo is the only successful device manufacturer that cannot. Apple comes close when they release a new iPhone, but even Apple meets demand far better than Nintendo does, and Apple has real demand for their products.

When you consider this though, you are ignoring every instance where Nintendo does meet and sometimes over-ships on demand.

Let's look at the commonly cited examples- Wii, Amiibo, NES Classic.

Now on the other side of that, we have-

Wii U: Massively overshipped to the extent that Nintendo lost a lot of money storing them

(other) Amiibo: Animal crossing Amiibo which you could find everywhere and really never sold

None of this paints a picture of a company who "consistently" cannot meet demand. Rather it paints the picture of a company who occasionally does not meet demand due to conservative production.
 
If the Switch is sold out at launch, that is to be expected and is not on Nintendo. If the Switch is still sold out in June and additional shipments have been minimal that is on Nintendo.
 

LordofPwn

Member
The switch went up for pre-order Thursday night in the US. I knew a handful of people in various states that were able to walk into a Game Stop and pre-order on Saturday.

i pre-ordered thursday night through best buy with no issues, amazon's stock didn't go up until after I was asleep.

2 Million units in march is not a small number, it's just that those get divided up globally.

Also I didn't think people were pre-ordering the Switch because there's no games at launch so why is 2M not enough?
 

Kazooie

Banned
They always do this. They are the only company to artificially create stock shortage and they do it to build hype like 'oh my God there's a Wii I must buy one immediately or I might have to wait for months'.
 
When you consider this though, you are ignoring every instance where Nintendo does meet and sometimes over-ships on demand.

Let's look at the commonly cited examples- Wii, Amiibo, NES Classic.

Now on the other side of that, we have-

Wii U: Massively overshipped to the extent that Nintendo lost a lot of money storing them

(other) Amiibo: Animal crossing Amiibo which you could find everywhere and really never sold

None of this paints a picture of a company who "consistently" cannot meet demand. Rather it paints the picture of a company who occasionally does not meet demand due to conservative production.

All of those products are also low margin items. You have much less wiggle room to quickly increase production on items with low margins.
 

Rebel Leader

THE POWER OF BUTTERSCOTCH BOTTOMS
I just think they are being more cautious after the wii u.

If the Switch is sold out at launch, that is to be expected and is not on Nintendo. If the Switch is still sold out in June and additional shipments have been minimal that is on Nintendo.

I agree
 
I haven't seen this discussed and was simply wondering if it was acceptable because this is a Nintendo thing. I checked to make sure it wasn't just gamestop and it isn't, several other retailers are reporting the same thing. Nintendo is only allowing an extremely limited number of preorders for the switch system and it doesn't currently look like we will be receiving any additional units outside of preorders. Either they aren't expecting it to do well outside of their hardcore fan base or they are with holding units to manufacture demand. Either way I'm not sure it's a good move on their part.

Please tell me you're not serious
 

aBarreras

Member
Okay, here is why your argument makes no sense. If you are making 1000 switches an hour but people are buying 1500 switches an hour, that is still not a natural shortage. You can always pony up more cash to increase your manufacturing capabilities.

In other words, your first scenario is the same exact thing as your second scenario except it doesn't have the conspiratorial non-factual spin.

"Natural" manufacturing shortages are only real in circumstances where NATURAL resources are scarce. An example of a natural resource are metals, diamonds, plants, water, food, etc.

That type of shortage simply doesn't affect the videogame industry. All shortages in videogame hardware are due to misaligned projections, investments and planning.


im just tyring to explain what people mean with this >_>

i dont remember too well but a company that provided a part of the wii u shutted down or something, so yeah, there can be shortage of parts making you produce less products by hour,

it is not just "natural" resources


edit: also no, you just cant throw more money and make more products,

foxconn is manufacturing this shit, and they manufacture a lot more of products, they know how much employees and hours and bla bla bla they need to meet the numbers of units that nintendo or whatever company requires.

so if the products is selling really fast, you just cant give them more money and whoop! suddenly there are more switch, foxconn need to plan to create new plants or something and that takes time, they dont just pop in from thin air and start making 500 more switchs, so yeah, in that case, thats a natural shortage i think\


if nintendo estimated to sell 500 switchs an hour and they suddenly selling 1000, they need time to plan the production and cover that demand.
 
I don't think its a fabricated shortage. They are going for a Global launch and can only make a certain number of units available launch day. This happens with any hardware launch. See Apple etc...

PS4 sold 1,000,000 on day one and they were very efficient in constantly supplying enough consoles to fulfill demand. If Sony could I don't see why the Switch shouldn't. Worldwide launch or not there is no excuse for this shortages.Either their fabricated or they really really really suck at supply-chain demand.
 

KHlover

Banned
They always do this. They are the only company to artificially create stock shortage and they do it to build hype like 'oh my God there's a Wii I must buy one immediately or I might have to wait for months'.
PSVR tho. That thing is almost as rare as the NES mini.
 

vpance

Member
Given that they only gave themselves less than 2 months to launch, they must have already had a set number in mind to manufacture, and the preorders numbers let them know how to divvy it up.

I don't think they care about meeting demand ASAP more than releasing it quickly post reveal.
 
They're just a really conservative company, people.

That's it.

They're not fabricating anything. They like money, first of all, and furthermore, they already think they have prestige without needing to have hardware shortages on purpose.
 

qko

Member
There are already a bunch of entries on eBay at around $500. Some as high as $900.

If Nintendo were smart, they would have a batch come about 1-2 weeks after launch, probably a lot of returns come in a month after and if Mario Kart hype is legit, there will be some of that stock to sell.
 

Aalvi

Member
Someone pointed out that despite the Wii being sold out, it did sell more monthly(allegedly) during those times than other systems. So if it sold more units despite being sold out...it doesn't mean they're holding back but rather not able to keep up with demand(which must be nice for them).
 

watershed

Banned
OP is right, I've never seen this discussed on gaf before.

Nintendo isn't fabricating shortages. They've been upfront about 2 million Switch units at launch, they couldn't keep up with demand for the Wii for years, they overshipped the 3ds because they thought it would sell way more, and they under-produced the NES Mini because they didn't realize how big a hit it would be. They hurt themselves more than consumers with short supply. Similar with Amiibo, at first they were hard to find but now they're just sitting on store shelves.
 

jblank83

Member
PS4 sold 1,000,000 on day one and they were very efficient in constantly supplying enough consoles to fulfill demand. If Sony could I don't see why the Switch shouldn't. Worldwide launch or not there is no excuse for this shortages.Either their fabricated or they really really really suck at supply-chain demand.

Sony pumped out about 3 million in the first month, which is roughly what Switch seems to be on track for. The question isn't launch supply but monthly stock after that
 
I take issue with your use of the word "fabricated". What videogame hardware/software shortages aren't man-made?

Are you saying that Nintendo is sitting on a stock pile of systems that have been manufactured that they do not want to sell? Because that would make no sense. They'd lose money housing those systems.

Are you saying Nintendo is deliberately not manufacturing enough consoles to meet demand? Well, I take issue with that accusation. It also makes no sense.

Are you saying Nintendo is too conservative with their sales projections? Considering how new of a product Switch is and the time of year it's coming out as well as the price and limited library, I could see where they are coming from. But that's the only sort of accusation that would make sense.

Eh...this would hold water if it didn't happen with every single Nintendo product released. Why are they they only company in the game that is never able to estimate demand?
 
Nintendo got burned by the Wii U launch when units just didn't shift, so they're being more conservative.

It's not fabricated hardware shortages, it's them being conservative because it bit them in the ass last time

I came here to say exactly this! There's also the idea that Switch is a new piece of hardware launching outside of shopping season.
 
They always do this. They are the only company to artificially create stock shortage and they do it to build hype like 'oh my God there's a Wii I must buy one immediately or I might have to wait for months'.

*Smack*

Sigh...

The Wii broke sales records throughout its shortages. What do you suppose that means?

THERE WERE MORE WII CONSOLES AVAILABLE TO PURCHASE THAN ANY CONSOLE, EVER.

Nothing artificial about that.
 
Sony pumped out about 3 million in the first month, which is roughly what Switch seems to be on track for. The question isn't launch supply but monthly stock after that

Mark my words: there's no chance in hell Switch will sell 3 million units in its first month. You need PS4 levels of hype to sell that amount and this new console doesnt have that. I think it'll have a big launch but it wont be even close.
 

ElFly

Member
yeah Nintendo is really in the business of not selling consoles

every scalper you see on eBay is actually a NOA employee

jeez
 
To me it feels like Nintendo is pushing this unit for a March launch in order to get some profits in by end of the next fiscal period. I'm not sure how they achieve that by sitting on consoles in order to 'create' demand. What are they selling right now? The Wii U is flat lining at retail with Zelda the final hurrah. The 3DS seems like its been sold out of stores since Christmas. The NES Mini is a LMAO as far as their availability. So what's their plan here? To not make money?
 

MisterHero

Super Member
I was able to preorder Switch in 2 seperate places so I think they did alright with Switch.

With Wii they outsold 360 and PS3 combined so they didn't hold back then.

They really fucked up on NES Classic. They're terrible with Limited Edition stuff as well. Scalpers have it too easy.

I don't see the problem with having checked expectations with Switch. It isn't exactly a viral sensation... Yet. Believe
 

Oneself

Member
No company would "fabricate" shortages just for fun.

Honestly, Nintendo looks like a budget-cautious company. They probably have a very limited amount of money for console production as they try to keep their head in the "green".
Stopping the WiiU production as they start the switch, recalling WiiUs to sell them as "refurbished" consoles (if that's confirmed), coming out with the NES Classic with very limited supplies (something seemingly easy to produce) coupled with their mobile offensive, ditching the WiiU and betting on a new console, paid online, ditching the VC...
 
The only video games home console or handheld that ever had ongoing stock shortages was the Wii.

The Wii was also the most stocked and fastest selling console of all time.

Stop creating a myth just because the amiibo (ones which the mass market wouldn't be interested in) and NES mini weren't well stocked.
 

dottme

Member
i know a friend missed out on Best Buy preorders that night, but he got one at a GameStop the next morning.

Nintendo has said there will be Two million sold WW by the end of March. There are rumors there is another million already produced as reserve stock.

Launch hype can be dangerous since many scalpers try to buy a lot, sell online, and return what doesn't sell before whatever 30 day policy runs out. The Wii U got burned by this pretty bad.

I'm wondering if we have any idea what is the impact of the scalper on the sale.
When you look at stuff like eBay, it looks like there are a lot of them. And the issue is this might return in stock soon after launch.
 
First I want to say I love Nintendo and I buy their products. I'm a big fan. But I'm not going to kid myself, this is definitely going on. They do this on purpose to create hype. There's no reason the NES classic couldn't of had more ready or that they won't prepare more switch when they know scalpers will buy a ton.
 
The only video games home console or handheld that ever had ongoing stock shortages was the Wii.

The Wii was also the most stocked and fastest selling console of all time.

Stop creating a myth just because the amiibo (ones which the mass market wouldn't be interested in) and NES mini weren't well stocked.
I remember the Wii situation. There was no way it had to be that hard to find 2 years after it came out. They were purposefully shipping under demand!they wanted it sold out everywhere. 2 years into Wii they knew very well how hyped it was and how they could increase numbers.
 
First I want to say I love Nintendo and I buy their products. I'm a big fan. But I'm not going to kid myself, this is definitely going on. They do this on purpose to create hype. There's no reason the NES classic couldn't of had more ready or that they won't prepare more switch when they know scalpers will buy a ton.
Why didn't Sony prepare more than 2m PS4s for launch month, especially considering it launched in the holiday shopping season?
 
First I want to say I love Nintendo and I buy their products. I'm a big fan. But I'm not going to kid myself, this is definitely going on. They do this on purpose to create hype. There's no reason the NES classic couldn't of had more ready or that they won't prepare more switch when they know scalpers will buy a ton.

I'm not sure if the best way to deter scalpers is to flood the market with more of your product than you can sell...
 
I remember the Wii situation. There was no way it had to be that hard to find 2 years after it came out. They were purposefully shipping under demand!they wanted it sold out everywhere. 2 years into Wii they knew very well how hyped it was and how they could increase numbers.

No console in the history of video games has ever had more stock produced and sold in its first two years than the Wii.
 
I remember the Wii situation. There was no way it had to be that hard to find 2 years after it came out. They were purposefully shipping under demand!they wanted it sold out everywhere. 2 years into Wii they knew very well how hyped it was and how they could increase numbers.
Oh dear God, you can't be serious. As has been said already, how did the Wii continue to sell faster than any other console before it and break records if there wasn't more stock available than any other console?? Think.
 
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