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Forums - Nintendo Discussion - Do you ACTUALLY believe that Nintendo is creating artifical Switch shortages?

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Aeolus451 on 22 June 2017
specialk said:
vivster said:

All I can say is that it's their product and their job to produce and distribute it.

Sure. The buck ultimately stops with them.

You could say that they're incompetent for not finding a way to manufacture more, but as the Wall Street Journal speculates, the only way might be to try and outbid for components which could mean selling at a loss.

So we have a situation in which you could either say they're incompetent for not outbidding Apple, or they're incompetent at making money on their flagship product.

I'd rather look at things more holistically and say that the situation just is what it is right now.

Your excuse doesn't work. You're forgetting that nintendo has had shortages with alot of their consoles and popular products for a very long time. Either Nintendo is the most incompetent company ever when it comes to producing enough of their products to meet demand or they're doing it on purpose in a controlled manner. Neither Sony or MS have these problems with shortages at this level the vast majority of the time. 



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KLAMarine on 22 June 2017
Aeolus451 said:
KLAMarine said:

What if Nintendo is just terrible at estimating demand for their products?

I don't buy that. They've been having "shortages" since the NES. If a team of or a few employees was the reason for the repeated shortages with just one console or product, they would have been fired by any company. The shortages are fact-of-life with almost all of their hardware and popular products year round. There's definitely a pattern and that's why there's alot talk from a lot of notable gaming journalists, youtubers, business people saying the shortages have to be on purpose because it happens so much and that it is clever of nintendo to do it. If it's not intentional then it's a monumental fuck up by nintendo to let it keep happening for so long.

Uncontrolled random shortages are a bad thing but managed scarcity is a good thing if done right. There's a word of difference between the two. By all means, keep saying that nintendo is incompetent enough to keep having shortages for over two decades. That narrative is pretty hilarous to me considering that many nintendo fans act like nintendo walks on water and they always like to point out how nintendo is such a great business. 

So tell me how does one distinguish between a product being scarce because the supplier is intentionally holding back supplies and a product being scarce because demand is greater than manufacturing and supply chain capabilities?



specialk on 22 June 2017
Aeolus451 said:

Your excuse doesn't work. You're forgetting that nintendo has had shortages with alot of their consoles and popular products for a very long time. Either Nintendo is the most incompetent company ever when it comes to producing enough of their products to meet demand or they're doing it on purpose in a controlled manner. Neither Sony or MS have these problems with shortages at this level the vast majority of the time. 

Lol. "My" excuse is what is being reported in the most respected business publication in the world. I'll stack that up against the wild speculation of vloggers any day.

And Microsoft and Sony absolutely do face shortages. When they release products that generate fervor and have high demand. The PS4 was difficult to find for months after launch. I bought my in late March of 2014 and had to call around to several stores. You can google "PS4 Shortage" to see more. The only piece of hardware that MIcrosfot has ever released to high demand (on par with Wii/PS4/Switch) was the Kinect.

And there were Kinect shortages. 



Aeolus451 on 22 June 2017
specialk said:
Aeolus451 said: There's definitely a pattern and that's why there's alot talk from a lot of notable gaming journalists, youtubers, business people saying the shortages have to be on purpose because it happens so much and that it is clever of nintendo to do it. 

Yawn.

As for businesspeople, the only one I saw in the links posted was a GameStop guy offering his opinion on the Wii shortage.

In hindsight, the Wii crushed the competition by millions of units in 2007-2010. 

Do we really think that Nintendo settled for selling 17 million Wiis in 2007, but really could have sold millions more had they simply flipped a switch? What would be the point?

"Artificial scarcity" was silly back then and it is silly now. 

The only Nintendo related argument you can make here is that they're a conservative company that hates having products sitting in warehouses. That goes out the window once the product is already a hit though. 

Since you guys just don't get what scarcity is and how it's used in businesses. I guess I'll try the explain the concept of artificial scarcity/scarcity marketing. 

What is scarcity marketing?

"Scarcity in marketing means to use the fear of shortage to sell more. 

It’s a fairly simple psychological premise. “We don’t have many Furbies left I’m afraid, you’ll have to buy it now if you don’t want to ruin your child’s Christmas” is the simplest and most extreme example.

However if we think of scarcity in terms of providing transparency about how much stock is left of a particular item, then it’s a very helpful, positive tool. 

Scarcity can also increase the perceived value of the item or service you’re providing.

Your products can become that much more precious in the eyes of a customer. The fear that there is only a limited supply will make the customer purchase faster and possibly with less thought."

 https://econsultancy.com/blog/64333-what-is-scarcity-marketing-and-should-you-use-it/

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Here's another explanation of it and how it works. https://www.entrepreneurs-journey.com/11170/scarcity-marketing/

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Here's some links to articles explaining how nintendo is using that business practice. 

https://eaves.ca/2008/12/11/wiinomics-nintendos-scarcity-strategy-keeps-paying-dividends/

https://www.pastemagazine.com/articles/2016/12/the-nes-classic-and-the-history-of-nintendos-produ.html


If you're still denying it then you're just putting your head in the sand. 

 



Aeolus451 on 22 June 2017
KLAMarine said:
Aeolus451 said:

I don't buy that. They've been having "shortages" since the NES. If a team of or a few employees was the reason for the repeated shortages with just one console or product, they would have been fired by any company. The shortages are fact-of-life with almost all of their hardware and popular products year round. There's definitely a pattern and that's why there's alot talk from a lot of notable gaming journalists, youtubers, business people saying the shortages have to be on purpose because it happens so much and that it is clever of nintendo to do it. If it's not intentional then it's a monumental fuck up by nintendo to let it keep happening for so long.

Uncontrolled random shortages are a bad thing but managed scarcity is a good thing if done right. There's a word of difference between the two. By all means, keep saying that nintendo is incompetent enough to keep having shortages for over two decades. That narrative is pretty hilarous to me considering that many nintendo fans act like nintendo walks on water and they always like to point out how nintendo is such a great business. 

So tell me how does one distinguish between a product being scarce because the supplier is intentionally holding back supplies and a product being scarce because demand is greater than manufacturing and supply chain capabilities?

Look up what scarcity marketing is and maybe look up anything on the history of nintendo's shortages. You'll see a pattern if you're being honest with yourself. 



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Aeolus451 on 22 June 2017
specialk said:
Aeolus451 said:

Your excuse doesn't work. You're forgetting that nintendo has had shortages with alot of their consoles and popular products for a very long time. Either Nintendo is the most incompetent company ever when it comes to producing enough of their products to meet demand or they're doing it on purpose in a controlled manner. Neither Sony or MS have these problems with shortages at this level the vast majority of the time. 

Lol. "My" excuse is what is being reported in the most respected business publication in the world. I'll stack that up against the wild speculation of vloggers any day.

And Microsoft and Sony absolutely do face shortages. When they release products that generate fervor and have high demand. The PS4 was difficult to find for months after launch. I bought my in late March of 2014 and had to call around to several stores. You can google "PS4 Shortage" to see more. The only piece of hardware that MIcrosfot has ever released to high demand (on par with Wii/PS4/Switch) was the Kinect.

And there were Kinect shortages. 

Did I not have this "Neither Sony or MS have these problems with shortages at this level the vast majority of the time." in my post?

Where did I say that sony or ms don't have shortages?



specialk on 22 June 2017

You're twisting yourself into knots to explain why popular things are hard to find.



VGPolyglot on 22 June 2017

No, I don't think they are creating artificial demand with the Switch, nor do I think they did so with the Wii, but they definitely did in the 3rd and 4th generations.



darkknightkryta on 22 June 2017
SegataSanshiro said:

When I was a manager at GS in 2007 Nintendo would purposely send us 2-4 units at a time and a space of about 2-4 weeks in between shipments. No way in hell was it that hard to manufacture a overclocked Gamecube 360's were selling like crazy and we still had a bunch stacked in the back room and that was a state of the art machine. So yes Nintendo does it. It's good business. Create a high demand with low supply. It's a tried and true tactic. Switch is popular yes but Nintendo wants the hype to ride for not just popular but creating even more demand for a double edge sword.

I remember those days.  Though thinking about it, Nintendo's run by a bunch of old men out of touch, so I just think they were expecting to sell what they're making.  The problem is that it'll take a few months for Nintendo to ramp up production, which I doubt they'll do.  And when they do decide they need to ramp up production, it'll be too late.



specialk on 22 June 2017

Iwata, discussing the possibility of launching the Wii in the Chinese Market during the October 2007 Q&A.

"the sheer demand in the existing markets around the world is already higher than the supply we can provide."

Regarding supply, Nintendo's presentation discusses bottlenecks and a short decline in production due to the Chinese New Year.

Artificially constrained supply is a conspiracy theory that relies on Nintendo frequently misleading and lying to shareholders and industry analysts.

One quarter into fiscal year 2007, after seeing what a hit the Wii was the previous December, Nintendo anticipated shipping 16.5 million Wiis during the first full fiscal year. They ended up shipping 18.6 million.

I want to know what the artificial crowd thinks they could have shipped had they not been constraining supply. I also want to know what the marginal value of shipping one fewer console is in terms of lifetime consoles sold.

These are answers that no one will offer up because this theory is bunk.

Here is the URL for Nintendo's IR library for anyone who'd like to dig in.

https://www.nintendo.co.jp/ir/en/events/yearindex.html