Tuesday, February 17, 2015

Nintendo Wasn't Ready to Be in the Toy Business

This past week, Nintendo held a call for their investors. This is standard practice for a public company, but as the contents of the call are public knowledge, it's usually a great way for fans of a company to get access to new information. As Nintendo fans all over the world hunkered for new details on the upcoming Zelda game, or Nintendo's efforts to bring their games to smartphone apps, one new detail made itself perfectly clear: Nintendo just isn't ready to be a toy company.

It seemed like a no brainer. With both Activision's Skylanders and Disney's Infinity toys tearing up the sales charts, making a toy to tie in to Nintendo video games was a slam dunk idea. Many fans had been expecting it and clamoring for it, and when Nintendo announced their Amiibo line of toys, excitement was at an apex. These particular style of figurines - detailed and collectible, but with an RF chip to allow them to be characters in a virtual world - reach to many different demographics. Young children get a toy of their favorite characters, with a chance to be those characters in a new world. Meanwhile, collectors can have tiny, beautifully made statues to hang on their wall or use in a game.

In both Skylanders and Disney Infinity, this has worked beautifully. While there's been a few characters that are hard to find, the majority are easily accessible and easy to collect for both types of people.

Figures are meant to sell for $15.

That's a screenshot from this morning. As you may have guessed, it hasn't gone as well for Nintendo.

Marth, the Wii Fit Trainer, and Animal Crossing's Villager were the first - there was a major shortage of them at stores, and stock was gone incredibly quickly. It seemed like a temporary oversight, until the rumors started flying that no more of these figures would ever be produced. Nintendo didn't respond to those rumors, and the fervour drove prices up even more. As the much desired Wave 2 of Amiibos approached, things changed. No one was casually walking to stores to check stocks anymore. Lines were forming. Figures were being snapped up. For a good example, let's take a look at my buddy King Dedede.

Dedede is Kirby's main villain. And while there's a million Kirbys on the shelf, last Friday each store got a shipment of one or two Dededes at most. He wasn't even offered in store at Target, and when h went for sale online he was sold through in around ten minutes. The demand and supply aren't meeting at all.

During their investor call, Nintendo released the following information. In America, these are the top ten highest selling Amiibos:

  1. Link
  2. Mario
  3. Pikachu
  4. Kirby
  5. Samus
  6. Yoshi
  7. Princess Zelda
  8. Donkey Kong
  9. Peach
  10. Luigi
That all seems to make sense, it's a pretty good cross-section of Nintendo's most popular characters. Now, here's the top ten "sell-through" Amiibos, meaning the top ten that have had the highest percentage of their stock sold:

  1. Marth
  2. Animal Crossing Villager
  3. Wii Fit Trainer
  4. Pit
  5. Captain Falcon
  6. Link
  7. Fox
  8. Rosalina
  9. Samus
  10. Yoshi
What do these two lists mean? The fact that there is almost no crossover between the most-popular list and the most-sold-through list means the Amiibos on the sell-through list have been produced in relatively tiny qualities. At first, it was believed that Nintendo was doing this on purpose - creating collectors items that would be highly desired. But after the incredibly-fast disappearing of most of Wave 2 (of all of the toys pictures at the top of the article, only three are not currently sold out everywhere), another theory comes to light.

Nintendo desperately wanted to get in on the Skylanders money. And it makes sense that they would. But they weren't ready to try. In typical Nintendo fashion, they underestimated the demand and didn't get ready to produce enough supply. Presumably, this problem is happening at the factory level - Nintendo has released several statements about retooling lines to reproduce Marth. It seems that Nintendo simply didn't contract enough factory space to produce meaningful amounts of product for most of their lines.

Now when you want into a shop, there's twenty Marios, Luigis, Peachs and Kirbys, and fifteen more empty pegs. It looks bad for the store, and when you look over to the incredibly well stocked Disney Infinity isle, it looks bad for Nintendo. Last week, during the mad rush for the new toys, one poster on a Facebook Amiibo collector group told a heartwarming story of handing the last Megaman toy to an eight year old instead of buying it himself. But the fact is, both of them should have walked away with the toy.

And they would have, if Nintendo had been ready to be a toy company.

Mike Fatum is the Editor in Chief of the Ace of Geeks, and a cohost on our weekly podcast. He belongs to way too many Amiibo collector groups now, and doesn't have enough rares to trade for the new ones.

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