Nope... I think this is a bat shit insane reason...

Rentals hurt sales more than help them. Nintendo needs more demos on the 3DS and Wii U and don't limit them to a certain amount of uses.

The thing about Nintendo demos is that the games have demos for what. A month before Nintendo pulls them, if that? Nintendo needs to get out of the mindset that they're going to be selling every game at full MSRP and accept the fact that a lot of people might rather buy at $20 or $30. By leaving the demos on the marketplace, then people will be able to play the games and might end up getting it after they play it regardless how old it is.

I think it could be argued rentals help sell additional copies at launch. Millions of people use Red Box and Gamefly, so a popular title is likely getting millions of dollars from those companies.

Also, renting a game can lead to people buying that same game eventually. I have bought numerous games I rented.

However, I wouldn't say lack of rental is the Wii U's biggest problem, not even close.

the number of plays is up to each publisher to select. I am sure they all decide how long they want that content on there.

I used to run a video/game rental store. I think people knowing that they have a nice supply of games to rent, for those who are regulars, can influence them when it comes to buying a console.

Let's say you're someone who rents a lot of movies. While you're there, you check out games because you've been wanting a new console. You see some great stuff for one console but nothing for another. That can have both a conscious and subconscious effect.

I'm not saying it's a massive effect but I do think it can siphon away product confidence, whereas having the games there to browse can build interest.

this doesnt make sense. Are you telling me EVERY publisher chooses to limit demos to 30 plays? I doubt it, WiiWare demos would disappear. I dont buy it. Why not do this for Sony and MS machines if this was the case. No this is just another example of Ninty doing something silly. 

30 plays? what? every game released as demo here has had varying plays, some 5, 10 some 15 some 30. 

still its a silly system. That means Ninty LIMITS the amount of times a demo could be used and the limit seems to be 30. No limits > limits. 

Strangely, I've seen small kiosks in shopping malls here in Argentina with Wii U and 3DS games, while a big rental place usually does not. I've even seen one that was overflowing with Nintendo decorations so I went there to see if there was any game I'd like to buy, but I haven't seen any Nintendo games at all - Hell, I've even seen PS4 and PS Vita in stock. Bought a Luigi and a Yoshi Super Size Figure Collection dolls though, so the visit was worth it.

In case this is useful: Argentina is a country where the PS brand is really strong since PS2 was ridiculously (Actually more than you can imagine) popular because of the piracy. No one here gives a flying fuck (Sorry for the expression) about paying for anything you can get for free. The only ones I know with non-pirate games are friends with PS3 who only buy... the yearly CoD and Fifa, and with some luck GTA V.
Still, as strong as PS is here, hardly anyone knows about PS Vita.

When I was a kid (in Argentina) I had a Super Nintendo with only 8 games, Super Mario World, Mega Man X, Mortal Kombat II, Street Fighter II Turbo, Samurai Showdown, Killer Instinct, Aero the Acrobat II and Tiny Toons.

But I did manage to play all of the Super Nintendo classics, like Super Metroid, or Super Mario RPG, because I rented games once per week.

I don't know if lack of rentals hurt or benefit nintendo. I remember reading of a game dev who paranoid about rentals and designed his game so that kids wouldnt be able to beat it in a weekend, and would have to buy it instead of just renting it.