Nintendfacts: Let’s talk about the NES Classic

First things first. Nintendo needs to talk about this themselves, other than saying they have other priorities and limited manufacturing. However that second fact is true since there is still a supposedly limited stock of the Nintendo Switch. The thing I want to talk about is releasing a product and one, not making enough of it, and secondly discontinuing it. Now I can understand why Nintendo wants to stop making the thing. It’s not a super profitable system they released. Polygon released an article talking about a couple of the reasons that possibly Nintendo discontinued production, and I think they have some points, but no facts to back those up. So here are the Nintendfacts about the NES classic.

(Yes we are all shocked that Nintendo is no longer making the NES classic)

Nintendo was only wanting sales for the Holiday Season-

Let’s be honest here, Nintendo knew that this console would sell and they knew that it was going to sell well. Why? Because Nintendo had nothing on the horizon for the WiiU. I mean yes there was a new paper Mario, but that series hasn’t sold well for years. So what did Nintendo do? It did the smartest thing it could do, sell an emulator with a bunch of their old games on it. Marketing brilliance? Perhaps, however it created a problem that Nintendo wasn’t ready for.

Nintendo is infamous for having issues keeping up with stock of its consoles. However, not so much with their games? Weird right? So Nintendo keeps saying this is holiday 2016 and that it will be available for 59.99 with a wide variety of games from the NES. Sounds great. I wish I had one. The reality is that again Nintendo either undersells themselves or creates a fake demand for it. I am part of a group on Facebook that almost every day someone is hunting one down, I mean I want one, but I don’t want one bad enough to leave the comfort of my own house.

(I mean 2016 wasn’t a good year for exclusives, Nintendo’s was pretty bare as well)
(Oh and BTW’s this list was way off on Sony’s games, but whatever)

So the answer is in the question? Why did Nintendo discontinue it? Well obviously it was waiting for the Nintendo Switch. Holiday 2016 was going to a barren wasteland for Nintendo. They knew that, they weren’t going to compete with Sony or Microsoft, they had already lost. So instead they released something cheap that people would buy as a holiday gift. Of course we all know how that ends, but regardless Nintendo done screwed up. They only sold about 2.5 million consoles which you know is on par with the Switch, oh and they can’t keep stock of either up. So they did the logical thing, drop the NES classic.

The NES Classic Can’t be a Huge Profit-

Let’s break the numbers down and be realistic for a second. We all know that hardware isn’t the money-maker in gaming. It’s the video games. So what is the product viability of something like the NES classic for years or even months? Well since we know the price of the NES classic, we know that we can assume a couple of things. First games profitability for the publisher is about 30$ at least according to this study. So that means that games keep releasing, several every month, and the publisher aka Nintendo in this case, keeps getting paid. So in the first weeks Nintendfacts and even last weeks I discussed how much profit was in handhelds and the Switch.

For the older generation consoles it was about half the price and for newer generation consoles it was about 1/5th the profit. So we can assume the same for the NES classic, again it may be more or less, but these numbers aren’t going to be given out anytime soon. So Nintendo will make about a 30$ profit again per console. Here’s the kicker though, those games are already pre-loaded. There is no extra games they can buy, sure there are controllers, but even that isn’t a huge profit maker. Unless we are talking about the 80$ switch joy-con’s…really Nintendo?

(seriously overpriced)

Anyways Nintendo’s 30$ profit is always going to be stuck at just that measly 30$ per console. So let’s just say for argument sakes that the NES classic could sell 10 million consoles in its lifetime. That would mean Nintendo would stand to make around 300 million dollars from the NES classic, which hey is good. However, that number is set in stone and that’s it. Sure they may sell peripherals, but then there are 3rd party manufacturers who will undersell you and all kinds of crap like that. No the real interesting thing here is throwing the Switch into the mix.

Now right now we know for certain that the Nintendo switch could very easily sell 10 million consoles by the end of the year. I hope they do. The reality is that right now there is no way that can happen because they are behind on manufacturing, because welcome to the unprepared world of Nintendo. Now the Switch is at a 50$ profit margin on the console so we already know that means about 500 million dollars can be made from the Switch if it sells 10 million consoles, which it should. However what Nintendo (and we now know) isn’t talking about is that the profit is in the games.

(They may only be Ps2 games, but the more they sell, the more profitable the system)

The NES Classic could sell 20 million consoles and it still won’t even get close the market viability of the Switch. So the question that comes to Nintendo is keep up good will with customers or make money? Now I’m sure there’s other math in there as well, but if you were faced with the question what would you choose?

Manufacturing Problems

Now I know that I am a little mean towards Nintendo on this, but it seems like the same argument for the past 10-15 years. Their consoles are out of stock, they are back-ordered and now Nintendo is trying to find a way to get that 8-year-old boy his Mario. I mean literally every single time Nintendo releases something. Even the WiiU and that sold terribly.So how many plants does Nintendo have to make these different consoles. So doing a little bit of research we can tell that one company primarily does all of the manufacturing, with other companies doing smaller parts of manufacturing. You know chips and the such.

This company is called Foxconn. Now that article is about the Chinese kids and how they were forced to make consoles. I know it’s terrible but the point is that we at least have a dot on where Nintendo makes it’s crap. So we don’t really have numbers on how many plants there are, since you know corporate business and all. However almost all major hardware developers utilize this company as well as many others. So the question is, is Nintendo utilizing enough resources to get their consoles made?

(The first picture of Nintendo’s Manufacturing plant, it’s a miracle they create anything)

Now I personally think that Nintendo actually has a real manufacturing problem. They don’t do any manufacturing in Japan anymore which means that everything is outsourced then comes back to them to be shipped out. Compare that to companies like Sony or even Microsoft who have manufacturing plants across the world. Of course Nintendo has a manufacturing issue. Why do you think everything they have is always on back-order? From Consoles to freaking Amiibos. Everything they sale, except for games, has a stocking issue. So the question is simply this why?

Now it could be a number of reasons and all of this is really conjecture at this point, but I think Nintendo undersells itself. I think they have a magic number that they have calculated. So they know that if they sell X numbers of consoles or this item they have made the profit they need. So instead of overproducing like every other company out there they only make what they know they need to show investors that they are profitable. I think it’s personally a risky business venture, but one that I can understand, at least on an economics scale. So it’s less of an artificial supply, but more of a limited supply due to economic worries.

THE SNES classic-

Now this isn’t confirmed, but I think one day we are going to get the Snes classic. At least I hope so. Here’s the kick in the face though, if they release the Snes classic this year, then we have some beef. First, since they are already having problems producing the switch, do they need to be making another console? Second, stocks of Snes classic have to be considerably higher than the NES classic to make gamers happy. Remember that the reason the NES classic and systems like it are so wanted are because these games are hard to get your hands on.

Tell me the last time you walked into a brick and mortar store and saw balloon fight on sale. I mean it just isn’t. This is where Nintendo needs to shine. They need to bring out the Snes classic, market it at 100$, but wait until 2018. Make enough of them to sell, because I will be at the store day one to buy a Snes classic. I don’t think that Nintendo would cancel the NES classic due the Snes classic being a release this holiday, but I have been wrong before. Not often, but I have been wrong a time or two in my life. Nintendo has a lot to prove but I don’t the Snes classic is as close as we all think.

(Yes please, but not yet)

In the end

At this point it really is all a big question of, “What is Nintendo Doing?” and why. It’s a question that currently can’t be answered, but I think with a little bit of research like above we get a better picture. Nintendo needs to prove its viability and economic stability. If it focuses on rereleasing older consoles with emulators then eventually they will fail. However, by focusing all of that attention to the Switch, Nintendo can prove it has come back from the dead to do good things. I hate that they discontinued the Nes Classic, but I can understand, if Nintendo does the right things.