The Real Reason NES Classic was discontinued (hmmmm)
They just wanted to move on it seems and focus on the future.
http://time.com/4759594/nes-classic-millions-sales/
http://time.com/4759594/nes-classic-millions-sales/
Comments
Yeah, what kinda losers care about the past anyway!
Buncha idiots, that's who!
Anyone understand that statement? From a regular perspective, sure. Each of us has limited resources and we need to devote time and energy into what's our top priorities. However, from a commercial perspective, if you have a very in-demand product, what's the rationale for setting it aside and not setting aside more resources to meet demand? Basically, I think Nintendo, with their statement, is doing this:
"We've got a lot going on right now and we don't have unlimited resources."
Anyone understand that statement? From a regular perspective, sure. Each of us has limited resources and we need to devote time and energy into what's our top priorities. However, from a commercial perspective, if you have a very in-demand product, what's the rationale for setting it aside and not setting aside more resources to meet demand? Basically, I think Nintendo, with their statement, is doing this:
Or maybe they have a new system out that they have a hard time meeting demand for and they want to devote all manufacturing and shipping to that.
I know I'm guesstimating a lot, but it looks to me like Nintendo probably, and very likely, left $25-30m easy dollars of profit on the table. Maybe Reggie is right, but all they would have had to do was keep the wheels rolling and those dollars would have come in.
"We've got a lot going on right now and we don't have unlimited resources."
Anyone understand that statement? From a regular perspective, sure. Each of us has limited resources and we need to devote time and energy into what's our top priorities. However, from a commercial perspective, if you have a very in-demand product, what's the rationale for setting it aside and not setting aside more resources to meet demand? Basically, I think Nintendo, with their statement, is doing this:
Or maybe they have a new system out that they have a hard time meeting demand for and they want to devote all manufacturing and shipping to that.
Exactly. I'm taking a managerial financing class for my MBA right now, and we just covered this exact thing. When Nintendo is saying they don't have unlimited resources they're taking about manufacturing capability and purchasing capital. When you come to a point of limited resources you produce as many units as demand dictates for the product with the highest earning potential, and then devote resources to lower profit units. In this case, Nintendo cannot produce enough Switches to meet market demand, and since it is more profitable, they should focus all resources on meeting that demand until the demand is exhausted.
For the mathematically challenged, 2.3 million units x $60 = $138m. Now, Nintendo probably sold these to distributors for 2/3s that, I'd assume. That's $92m in revenue. I'm going to assume that this had a profit margin of at least 50%, which would be $45-46m. I'd assume that profit margin could have been even higher if they just kept purchasing all of the necessary components from the secondary manufactures and just output these devices until Q4 2017.
I know I'm guesstimating a lot, but it looks to me like Nintendo probably, and very likely, left $25-30m easy dollars of profit on the table. Maybe Reggie is right, but all they would have had to do was keep the wheels rolling and those dollars would have come in.
Even so, this assumes unlimited manufacturing capacity (meaning they can produce as many NES Classics and Switches as demand requires) which probably is not true. More that likely a portion of the Switch's manufacturing capacity was allocated to the NES Classic (since the overall profit wouldn't dictate adding new manufacturing capabilities just for the NES Classic). In that case they have to discontinue the NES Classic in order to maximize profit. It sucks, but they aren't doing it for the love of gaming, they're producing these systems to make money. And the Switch just brings in more.
"We've got a lot going on right now and we don't have unlimited resources."
Anyone understand that statement? From a regular perspective, sure. Each of us has limited resources and we need to devote time and energy into what's our top priorities. However, from a commercial perspective, if you have a very in-demand product, what's the rationale for setting it aside and not setting aside more resources to meet demand? Basically, I think Nintendo, with their statement, is doing this:
Or maybe they have a new system out that they have a hard time meeting demand for and they want to devote all manufacturing and shipping to that.
Exactly. I'm taking a managerial financing class for my MBA right now, and we just covered this exact thing. When Nintendo is saying they don't have unlimited resources they're taking about manufacturing capability and purchasing capital. When you come to a point of limited resources you produce as many units as demand dictates for the product with the highest earning potential, and then devote resources to lower profit units. In this case, Nintendo cannot produce enough Switches to meet market demand, and since it is more profitable, they should focus all resources on meeting that demand until the demand is exhausted.
I admit to not knowing much about business, but seems to me you're assuming Nintendo is making more money of a Switch than an NES Classic? I think in the long run that's definitely true (peripherals, games, etc). Per console though, I wouldn't be surprised if that's not so clear. Switch is far more advanced and costly a machine, although I don't know the details. Plus, couldn't Nintendo raise the prices on the NES Classic and thus do better? Even if they raised the price to $80 instead of $60, it would probably sell like crazy. (Nintendo is really blowing this in my opinion.) Thirdly, bottom line isn't everything. Even for a large company such as Nintendo, I don't think they should be annoying their customers (as they have been). Granted, this is an egregious example, but just ask United Airlines what happens when you try to maximize your profit without due diligence.
Also, I don't think the issue is that Nintendo is not devoting more resources to the Switch. The issue is that people at some point would like to be able to purchase an NES Classic, and Nintendo said "Hey, we hear you. You love this, it's great, right! Nope. NO more. Ever. Now go out and buy a Switch!"
Also, it looks like here's the real reason Nintendo is not making the NES Classic. Why make something people want, when you can produce:
Dont forget they will continue to make money on things like the switch and 2ds via virtual console and games. Once you spend money on the classic thats it.
I have seen more salt around that damn classic than almost any other gaming item I can think of.
Yeah, what kinda losers care about the past anyway!
Probably a bunch of dorks that make a forum 20 years from now to talk about the NES classic.
lol this. and emulating the rest.
Touche!
Touche!
Replace NES with RetroPie and the gif would be perfect.
I lol'd.
Most Ironically, I would wager the most experienced salt miners have multiple other ways to play those 30 games (everdrive, carts, emulation)
Making money on a product line is dumb. What we need, gentlemen, is another DS variant. Get the licensing for Qix and we'll be unstoppable!
Yup. The announcement of a "new" 2DS XL proves that "we don't have unlimited resources" is a bullshit excuse. This product pays for its own production and distribution.
Whose to say that there wasn't licensing issues? I can't of been the only one who was surprised at the number of 3rd party titles on this Nintendo machine! What if Konami (for example) saw the buzz around this thing and wanted a bigger piece of the pie?
Whose to say that there wasn't licensing issues? I can't of been the only one who was surprised at the number of 3rd party titles on this Nintendo machine! What if Konami (for example) saw the buzz around this thing and wanted a bigger piece of the pie?
well I would assume there would be contracts involved. Maybe they only made it for a certain number of units or certain period of time. Once that was up the 3rd parties can renegotiate, and Nintendo can decide to not go through with it
Whose to say that there wasn't licensing issues? I can't of been the only one who was surprised at the number of 3rd party titles on this Nintendo machine! What if Konami (for example) saw the buzz around this thing and wanted a bigger piece of the pie?
well I would assume there would be contracts involved. Maybe they only made it for a certain number of units or certain period of time. Once that was up the 3rd parties can renegotiate, and Nintendo can decide to not go through with it
If what Nintendo is saying is true, that they simply underestimated demand, I think it is very plausible that they only signed really short or limited contracts with these companies. Just enough leeway to see them through the holiday, or whatever. Perhaps the contracts were lump sum deals, rather than ongoing payments, in which case there's no way they would give Nintendo a perpetual license to reprint their games. All speculation, of course, but can anyone remember any other time where Nintendo directly incorporated 3rd party games into one of their products?
Whose to say that there wasn't licensing issues? I can't of been the only one who was surprised at the number of 3rd party titles on this Nintendo machine! What if Konami (for example) saw the buzz around this thing and wanted a bigger piece of the pie?
well I would assume there would be contracts involved. Maybe they only made it for a certain number of units or certain period of time. Once that was up the 3rd parties can renegotiate, and Nintendo can decide to not go through with it
If what Nintendo is saying is true, that they simply underestimated demand, I think it is very plausible that they only signed really short or limited contracts with these companies. Just enough leeway to see them through the holiday, or whatever. Perhaps the contracts were lump sum deals, rather than ongoing payments, in which case there's no way they would give Nintendo a perpetual license to reprint their games. All speculation, of course, but can anyone remember any other time where Nintendo directly incorporated 3rd party games into one of their products?
Super Smash Bros, in a way. Technically, the virtual console is one of their products, as well.
The situation has been further proof Nintendo could slap their name on an actual turd, find out it sells like hotcakes and then immediately start a corporate policy disallowing shitting.
After they straight up lied about the lack of tablet use in BoTW for Wii U I would never believe what Reggie or any other Nintendo rep uses as an excuse/explanation for their decisions.