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

Tagged games:

niceguygameplayer said:
I think it's likely. With their past, I could believe it. They could build up this strong desire to have what ppl can't have: a Switch. At least not at a decent price. Then around Christmas, they could release a huge ammount of them at record sales. Supply constraints because of competition with Apple may be a rumor spread by Nintendo themselves. I'm not saying that Nintendo is doing this, but I do feel that it is likely.

Also, I am aware that this site has (at least it seems this way to me) a majority of Nintendo fans, so I expect hate for my opinion, but you asked a question and I answered honestly.

Except the so-called rumor you're talking about isn't just coming out of thin air. Its being known worldwide about manufacturing parts and assembly lines being affected significantly and it'll be that way for probably the rest of the year.

http://www.usgamer.net/articles/nintendo-is-facing-off-against-apple-for-switch-hardware-parts

http://www.marketwatch.com/story/nintendo-battles-apple-for-parts-as-demand-for-switch-console-soars-2017-05-30

Whether you believe this or not, this is something thats likely keeping Nintendo from producing more Switch units efficiently.



Around the Network
Mnementh said:
Vor said:
It's just a dumb way to downplay someone's success. Tbh I didn't see any benefit for the company with creating artificial shortage, well apart from fooling customer that their product is a hot item. But it still hurt their image and reduce their revenue so it's a huge risk with little reward.

There is no way this is beneficial. There might be a slight increase in demand from people who think: my this is hot, I need it too. But for starters: a console never reaches the level of hotness like an iphone. The increased demand from a hot item is mostly because all your friends have it, not so much because you don't see it in stores. The downsides outweigh it massively. You lose the impulse buyers, you piss of customers who try to find it. On the forums somewhere someone told about a friend who set out getting a Switch and came back with a PS4 - to have at least something, you know.

Well I was being sarcastic in the hot item part



A handheld gamer only (for now).

SuperNova said:
StarOcean said:

Not with the Switch. But I do believe with 100% certainty they did with the Wii U and Amiibo

I....what? The WiiU sat on shelves unwanted and unloved for years and eventually retailers just moved it out to clear shelve space. We even had threads on this site about the crazy (unofficial) discounts it was getting even though it had only released six months ago. There were provably no artificial shortages going on with the WiiU. It didn't sell and by the time it picked up a litte Nintendo had stopped production and the Switch was in the works, so rather than kick up production again wich would have been costly and ineffective, they let the leftover supply 'carry' it until it's demise last year.

Artifical demand only 'works' if you're actually trying to sell units. That's why it can't apply to either NES mini or the WiiU. Nintendo dicontinued both of them, thus they didn't gain anything by 'creating artificial supply'.

Amiibo were a surprise hit and sold out because they were popular. Nintendo did up production and most of the original 50 are readily available now. I get the feeling they downsized manifacturing quatities again for the newer Amiibos, with waning Amiibo popularity though. The Zelda BotW ones haven't seen a single restock since launch for example.

I think you hit it right in the mark about amiibos. As popular as Nintendo characters and their respective IPs are, it was probably hard to gauge their potential popularity upon release with amiibos, especially during a time when the 3DS and the Wii U were selling below the rates of their respective predecessor's. Wihle toys-to-life was still popular at the time, it's not too long ago they faced a decline. I don't know any numbers right now, but I don't think the sales are as big as they used to be 3-5 years ago.

As for the NES Classic Mini, it probably was inexcusable sell low productions. Due to the nostalgia, there's still a huge craze for retro gaming and the NES Classic was a big deal, especially at the $60 price tag it had. There's a possibility it discontinued due to having similar chips and parts to the Switch so Nintendo had to put more focus on the Switch, obviously, since its the new console and part of their bigger investments while the NES Classic was meant to be more of a smaller but still popular thing.



I am going to be clear. I am was never trying to downplay the Switch success. I really like Nintendo and will be getting a Switch at a later point. If Nintendo does this or not I am not bothered anyway. Switch is great. I enjoyed the Wii.



No, it's a stupid notion.
They would only benefit from supply manipulation, if they have incredibly high profit margins. Or if they are in control of their market, a market leader or monopoly.
Also, people should keep in mind Nintendo is a public company with shareholders to please. And they judge Nintendo's performance quarterly. I don't know if Nintendo said anything about supply to shareholders, but Nintendo can't purposely lie about their business to shareholders. If they say they have supply issues, it is mostly true, unless if they wanna risk getting sued.



Around the Network
TruckOSaurus said:

Well do you?

i've seen it said time and time again in various sales threads but I somehow can't bring myself to believe some people actually believe it. I mean, I could understand saying it to rile up Nintendo fans, it's surprisingly effective and fun but not actually believing it.

To be clear, I'm not talking about Nintendo setting aside units for big release weeks, I'm talking about people who really think Nintendo has loads of Switch consoles hiding somewhere and they're not shipping them to retailers who are begging for supply just because they want game sites to publish articles about stock issues.

To me that is pretty crazy but who knows maybe some users here can make sense of it?

Miyamoto is probably hiding some of the stock in his basement.



Aeolus451 said:
Yes. Mainly because I don't believe in coincidences of this size with businesses. You're not gonna have shortages (wii, nes classic, amiibo, switch, ds, etc) for as long as Nintendo does and with this many of their products. The people responsible would eventually lose their job over it if it kept happening. Artificial shortages, artificial scarcity and managed scarcity (whatever you want to call it) is a known business tactic and nintendo has been doing it for awhile. Having shortages once in a blue moon is one thing but it repeatedly happening with all of their popular products is quite another.

https://www.theverge.com/2017/4/13/15294494/nintendo-nes-classic-edition-console-discontinued-strategy

http://www.gamasutra.com/view/news/109643/Opinion_Why_Artificial_Scarcity_Could_Boost_Digital_Game_Downloads.php

https://www.engadget.com/2007/03/27/wii-shortage-is-intentional-according-to-gamestop/

http://n4g.com/news/2014325/gamestop-and-target-cancelling-some-switch-pre-orders-due-to-shortages

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



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.

2 to 4 units does seem like very few but if you've got a limited amount and are trying to spread it out across the thousands of stores across the US. I can see it as possible that your store got so few units.

VAMatt said:
It is possible that they purposely fell short of demand at launch. That creates lots of buzz. It is also possible that they're still affected by that intended shortage at launch. At this point though, they are certainly trying to get as many units as possible into retail channels. There is no hype to build right now, just sales to lose.

There is a reasonable chance that they will purposely be short at the beginning of the holiday season. I think it would be smart to sell out early on Black Friday weekend in the US. That gets you lots of mentions in the news. But, you need to stock all retailers back up by the next weekend, so that you don't lose many sales to XB or PS. Maybe keep it tight for one more week, but have enough supply that parents figure they'll be able to find one before xmas. Then, make sure there is plenty of supply for the last 3 weekends before xmas, so everyone that wants one can get it.

I'd argue that Black Friday is definitely  a day where they don't want to be undersupplied. You've got tons of busy parents doing their holiday shopping, they don't want to come back another day so if they don't find a Switch many of them with go with an alternative, be it another console or something else entirely (to the dismay of their kid).

StarOcean said:

Not with the Switch. But I do believe with 100% certainty they did with the Wii U and Amiibo

Did the Wii U ever have stock issues?

ArnoldRimmer said:
TruckOSaurus said:

Well do you?

i've seen it said time and time again in various sales threads but I somehow can't bring myself to believe some people actually believe it. I mean, I could understand saying it to rile up Nintendo fans, it's surprisingly effective and fun but not actually believing it.

To be clear, I'm not talking about Nintendo setting aside units for big release weeks, I'm talking about people who really think Nintendo has loads of Switch consoles hiding somewhere and they're not shipping them to retailers who are begging for supply just because they want game sites to publish articles about stock issues.

To me that is pretty crazy but who knows maybe some users here can make sense of it?

Do you ACTUALLY believe in the holocaust?

Well do you?

To be clear, I'm not talking about the Nazis being responsible for the death of millions of jews, I'm talking about people who really think Adolf Hitler was a time traveller from planet Melmac who personally killed all the jews while wearing a pink and yellow striped mini-skirt and a giant penis-shaped tampon on his head, just because he wanted international newspapers to publish articles about him.

So there you have it: the holocaust (that is, as per my extremely limited definition) didn't happen, only an insane person would believe something that crazy.

Seriously: you're basically trying to prove that there is no "artificial Switch shortage" by limiting "artificial Switch shortage" to a very narrow and indeed rather unrealistic definition.

"Setting aside units for big release weeks" would obviously already be a case of storing "Switch console somewhere and not shipping them to retailers who a begging for supply". Furthermore, the idea that a manufacturer would drive production at the maximum and store all the excess units in warehouses doesn't make much sense to me; a manufacturer who indeed wanted to use an artificial scarcity strategy would probably rather not drive production at the possible maximum instead.

And to those suggesting that artificial shortages wouldn't possibly make any sense, because of "birds in the hand" etc.: "Artifical scarcity" exists, intentionally keeping supply below demand is a well-known strategy in marketing etc. If you don't see any possible reasons why a sane manufacturer would possibly do something like that, chances are you just don't know that much about economics.

I'm not saying that Nintendo is indeed (still) intentionally keeping supply below demand (I neither know nor really care), but it's not that hard to think of possible reasons why Nintendo might consider doing so for a limited period of time.

Your analogy is terrible but I get your point nontheless. I thought about leaving it open ended but it wouldn't have given my the answers I was looking for. In the end, my proposition wasn't that extreme since they are users who responded affirmatively to it and provided their own reasoning for it which is what I was interested in.



Signature goes here!

No. The idea itself is pure BS. Nintendo needs to gain a large installbase ASAP to maintain maximum profitability now that they will only rely on one device. The more the bad supply lasts, the more potential customers they might loose. Simple as that.

Nintendo doesn't want to create the image of a highly-desirable product by enacting shortages, they want to be the go-to gaming device that anyone can pick up as soon as they want and start buying games for it.



Vote the Mayor for Mayor!

nobody with basic business understanding would seriously suggest that the artificial shortages are a thing. The only way it could benefit a business is if it was done in an extremely marginal way; i.e. providing very SLIGHT amount less than demand as to maintain a fake hype.

Unfortunately if you're in a scenario where you're providing a fraction of the amount of systems in relation to demand- it provides extremely limited benefits. It stops/prevents larger software sales (the bread and butter of the industry), and potentially results in somewhat bad PR for a business (threads exactly like this which suggest the company is not necessarily looking out for their customers).

Beyond a business perspective- there is a lot of background talk recently with the scarcity of certain components for mobile electronic devices; only a few companies are currently making extremely high end parts and the resources used to create these are highly limited. when you're competing with Apple or Google for manufacturers- well there really is NO competition. You just wait your turn. That's where Nintendo is at currently.

 

Again, artificial scarcity only makes sense when marginally done to build a bit of hype while maintaining solid sales. If you're providing a fraction of the systems that could potentially sell then that's just suicidal as a company like Nintendo certainly wants high revenue ASAP because that's what funds future development of games (its a circular thing).

Artificial shortages also are somewhat illogical on really hot products. Something like the Switch is useless to deliberately undersupply because it has great word of mouth currently and is pretty positive online. IF this was a Wii U scenario where the initial allotment had taken a while to sell and was doing mediocre- undersupplying might make sense to be safe and to potentially make people want something they can't get it (although rarely does that actually work because in the end the demand is there or it's not, regardless of supply). 

In the end we have an awkward combination of Nintendo likely being conservative going into this generation after what happening with the Wii U's initial gigantic first week supply sitting in stores for months- and a difficulty with the top manufacturers of specific parts that the Switch and other mobile devices use and have in common.

I don't think what has happened is rocket science and the artificial scarcity stuff is just absurd and generally has not explanation in theory. It's like the people who claimed the NES Classic was deliberately being undersupplied despite the demand. Ehrm... yeah... Nintendo undersupplied the system to build hype and then just discontinued it entirely when they don't appear to have plans for Virtual Console anytime soon on the Switch. The point being that there was no scarcity ploy, and that people just give frustrated and come up with asinine theories.

Nintendo misread how well the Switch would do (as did many people online), and happened to decide to try to boost supply in an awkward period of time where there is high demand for the same parts for different electronics. That's all