What this 127-year old brand needs to consider to stay relevant.
The Nintendo brand is a long time favorite in many households. The mere mention of the NES sends a flood of happy memories to most people over the age of 21, most notably, blowing air into the bottom of those coveted plastic cartridges after a few heated hours of gaming. Am I right?
It would seem that Nintendo was also waxing nostalgia, when it announced in August that it would be releasing a smaller Nintendo console dubbed, the “Classic Edition,” one that would be very reminiscent in appearance to the original Nintendo console. But, the most exciting reveal in this announcement was that thirty games would be pre-installed, no cartridges necessary! A bittersweet moment if you ask us. Among these thirty games are the very popular Mario Bros™, Pac-Man™, Galaga™, and Donkey Kong™. Endless hours of fun with some throwback game time.
The NES Classic Edition retailed at a strikingly low cost of only $59.99. The catch? Nintendo sold a very limited quantity at select stores such as GameStop, Best Buy, Walmart and Target. Amazon opened online sales at 2pm PST on Friday, November 11. Within seconds, all consoles were sold out. Nintendo released this statement in response to the high demand “The Nintendo Entertainment System: NES Classic Edition system is a hot item, and we are working hard to keep up with consumer demand,” it said via Twitter. “There will be a steady flow of additional systems through the holiday shopping season and into the new year.”
This isn’t the first time for Nintendo. The brand can never seem to satisfy customer demand with their conservative, post-bankruptcy tendencies. Nintendo has also been very coy in announcing when and how many consoles will be released before the holiday season and fans of the brand are disappointed, yet again. The Amazon reviews, for example, dropped from 5 stars to 1.5 after frustration escalated from not being able to get their hands on an NES Classic.
What does this mean for the Nintendo brand? We’ve got two very different perspectives from our industry experts.
WTF (What the Faxanadu) Nintendo?! Time and time again, fans are disappointed with low quantity and high demand. It happened first with the Nintendo Wii, people queuing up for hours, even days, outside retailers for a shot at landing just one device. Next, Pokemon Go could not sign up the amount of people interested in the game fast enough and the site often crashed (although, Nintendo did not develop Pokemon Go, it does share stake in the company and was blamed for the lack of forethought.) And now, to the surprise of no one, the Nintendo NES Classic Edition has officially sold out in both brick-and-mortar and online retailers.
What the frustrated consumer wants to say to Nintendo: Start doing more market research and testing for your products, especially if you’re concerned about taking risks! Discover what the consumer demand is, and plan accordingly, before releasing a product.
The Nintendo NES Classic Edition announcement was well-received by many fans early on. In fact, the interest sparked many bloggers, retailers and Nintendo fanatics everywhere to overshare and promote the impending release. By the time the console was available for retail, the consumer demand had exponentially outnumbered the limited supply of product.
So why were so few released? Nintendo didn’t do their homework, and as a result, they left thousands of fans disappointed/disenchanted, left a major blemish on their own brand, and created a tremendous opportunity for scalpers to take advantage (we’ve seen consoles listed at $1,000 a pop!)
Nintendo, on behalf of all Gen X and Y babies who loved playing Paperboy™ and Tecmo Bowl™, please do your fans a “solid” and do it right for your next product launch.
While Nintendo may have frustrated many loyal consumers, especially those who feverishly refreshed their Amazon page trying to purchase the Nintendo NES Classic Edition last Friday, we have to wonder if Nintendo’s limited release of this iconic product was intentional.
Was the limited release of the NES Classic Edition indeed a conservative play in light of Nintendo’s file for bankruptcy? Or was it a strategic ploy to create a buzz to revitalize the Nintendo brand?
While we may never know Nintendo’s strategy, there is no denying that demand for the NES this November was indeed overwhelming. Here are a few substantial consumer behavior factors Nintendo may have considered in releasing the shortage of the revamped NES:
1. Golden Ticket Theory:
While Charlie & the Chocolate Factory takes us down memory lane, much like the NES, there is something else these two classics have in common: the rare chance to once again experience something we all thought expired. Reviving a nostalgic product is a strong enough sentiment to motivate consumers to buy, however, announcing limited access and supply of the product amplifies the desire. Everyone wants the golden ticket, even if it comes in the form of a gray and black box.
2. Millennial Buying Power:
“Millennials in the U.S. wield about $1.3 trillion in annual buying power” (Boston Consulting Group). Not only do these numbers drastically impact the demand for this product, they also make up the majority of Nintendo’s target audience. We have to assume that Nintendo predicted their market all along. Now, many of you are asking yourselves, why does this generation care about a two-dimensional game console originally released in 1983? A time before more than 75% of them were even born? To answer that, we have to consider their buyer behavior.
3. Hipster Influence:
While many will argue that the “hipster movement” is on its way out, there is no denying that it has influenced millennial consumer behavior. Though a true hipster will never admit to their stereotypical tendencies, they are notorious for encouraging individuality and defying mass-produced products anyone can grab off the shelves. Shopping for throwback unique clothing at thrift stores and hunting down classic vinyl records, the hipsters have influenced the millennial generation to embody their eccentricity and embrace the 90’s culture. The NES Classic Edition fulfills their yearning for a childhood game and their desire for an exclusive product.
While Nintendo’s financial status may be rocky, their knowledge of the market is pretty spot on. Anticipating the demand of this unique product among millennials and understanding their consumer behavior, Nintendo intentionally sold a short supply so the early adopters and influencers of the tech industry with market their product for them. Assuming Nintendo’s minimal advertising budget, their reliance on word-of-mouth marketing from their primary target audience was low-risk and extremely effective.
Whether we believe that Nintendo failed us, or graced us with a smart product release, we can only hope that they appropriately respond and produce thousands of more units in time for us to play Punch Out!!™ on Christmas morning.
Just remember: up, up, down, down, left, right, left, right, select, start…
By: Theresa Gallego & Katie Chapman