Like It Or Not, NES Classic’s Discontinuation Is A Strategic Move

Today Nintendo formally announced it will discontinue the NES Classic Edition in the West, a decision already prompting dismay and vexation across the internet and gaming enthusiast landscape. Nintendo’s reasoning is that the company already shipped more NES Classics than it ever intended to, and for a limited-run product that should be enough. The explanation would probably be seen as reasonable, were it not for the subtle messaging of the limited run and the field day scalpers had with the device. This often occurs with Nintendo’s collectible amiibo figures as well, so understandably, tensions are high.

 

Given the circumstances I can understand the resulting frustration, and as someone who wasn’t able to get an NES Classic myself, I’m sympathetic to the cause of those angered by Nintendo’s call. One perspective I’m less behind, though, is the criticism of Nintendo’s business decision from a company health or profit point of view. Already on forums and elsewhere I’m seeing a lot of “this is money left on the table,” “Nintendo is so stupid,” and the classic, “clearly they just hate making money.” I can understand why these reactions arise, but ultimately they’re both shortsighted and misguided.

 

Like it or not, the discontinuation of the NES Classic is a strategic move, and had more thought and calculation behind it than most internet hot-takes have considered. Nintendo is a business, one that has endured for over 120 years. That’s not to say it can do no wrong, but the notion that it doesn’t comprehend the simple premise of more NES Classics sold equaling more money (and that enlightened web responders will reveal the path toward untold riches) is a preposterous one. If this decision doesn’t at least forecast net benefits for Nintendo, then you can be sure the company wouldn’t have reached it

 

Trust me, Nintendo hasn't suddenly forgotten how to do this.

So what counts as a benefit? Well, there’s the financial perspective, and as we all know Nintendo loves to peddle its classic games ad nauseam. It’s not so much that NES games in particular are going to be cash cows on Switch’s Virtual Console come holiday season, but rather Switch itself. As many have speculated (and I believe to be true), the Switch’s March 3rd release was something of a “soft launch.” It enabled Nintendo to use Breath of the Wild as a launch title, get the system out the door, and because of this singular, monumental launch title, shift an impressive volume of units in advance of the holidays.

 

Switch’s success is the single most important thing for Nintendo’s vitality (especially after Wii U) in the coming years, and as such absolutely zero gambles can be allowed: this includes cannibalization by its own products. For Switch to have Wii-like mass appeal (something its motion controls and hybrid nature enable), it needs to have the most mass appeal of any gaming system on the market. The NES Classic Edition, at a mere $60, harms that narrative. That’s not to say that Switch wouldn’t still have a fine holiday in tandem with the NES Classic, and surely the NES Classic’s profit margins are through the roof. But that is a single-year outlook, rather than a five or ten year one. Nintendo’s largest priority, above all else for long-term prospects, is to drive the Switch’s install base. To do that, you need Wii era buyers interested, you need core gamers interested, and you need potential Virtual Console customers interested. For the public at large (ie non or former enthusiasts), NES Classic cuts into that.

 

Is a SNES Classic imminent? Perhaps not soon, but it seems likely (image source).

 

Beyond Switch, I have a suspicion that Nintendo harbors a bit of a kink for its products becoming “fabled” in their unavailability. The NES Classic Edition will now become a sought-after, coveted collector’s item, and once the frustration surrounding the end of its manufacture fades (it won’t take long), what remains is “hey, remember when Nintendo made that tiny NES?” Ebay prices will soar, think pieces and retrospectives will be written, and perhaps a bit like the Game Boy Micro, the device will no-doubt be remembered fondly. At the very least, it becomes an odd wrinkle in Nintendo history, the kind of quirk geeks and collectors go wild for.

 

It’s also worth keeping in mind that NES Classic featured about 30 NES games. Should Nintendo decide, a future edition could be revived at any time with say 60 games, again as a limited edition (or if Switch is by-then deeply established, in more generous quantity). There may also be an SNES Classic someday, or any other permutation of nostalgia and classic games Nintendo decides to muster.

 

There are likely those reading thinking “well I know all of this, I just hate Nintendo for doing it,” and to those people, I would never begrudge you that position. But to those who assert it is they who hold the key to Nintendo’s untapped money-machine, if only the company would just seize it, I have news for you – you might not be seeing the larger picture.