Amazon sells out of the NES Classic Edition in less than a minute
techcrunch.com
techcrunch.com
I highly doubt that. My guess is that third party resellers used bots to purchase them all.
Why wouldn't tc come to the same conclusion?
Edit. yep here's one on eBay for $500+:
http://m.ebay.com/itm/New-Nintendo-NES-Classic-Edition-Conso...
Likewise I imagine these types of companies tend to generate some level of complaint from sellers to the provider. They are really aggressive bots that can create attack level traffic spikes, and break a sellers TOS (snicker) in some cases.
For now... ¬_¬
In theory it encourages people to bid their true preferences rather than waste time sniping.
I had the Amazon app open on my phone and the website on my MacBook. I added it to my cart from the app at approx 14:00:01 ET, and by the time I clicked the cart and then checkout I got an error message saying the item was sold out.
I was so pissed that this happened, because I had been planning to follow this diligently since the day it was announced, and I had no less than 3 calendar events in my phone so that my day would be replete with reminders. I had the other websites that were supposedly selling it open as well, as a failed backup plan.
I should have written a script.
(Probably those Aibos are not to be trusted with cash.)
As usual, Nintendo doesn't get their customers and is completely unprepared.
Untrue. The secondary market is currently selling units at a huge markup. I don't think we have a great indication at the moment on how fast the secondary market is moving; it's possible that, whilst Nintendo might have undervalued demand, the resellers are overvaluing it. As others point out, this also helps drive demand to an extent - it's a phenomenon Apple appears to take advantage of from time to time.
They lose nothing monetary.
[1] - https://liliputing.com/2016/11/orange-pi-zero-7-quad-core-de...
[2] - http://www.cnx-software.com/2016/11/08/nintendo-nes-classic-...
http://www.slate.com/articles/health_and_science/science/201...
But consumers with too much money are also helping this "economy" with their purchase decisions. That eBay NES Classic in the parent comment was just sold for $610, more than 10x the retail price, and there are many other offerings. Just take a look at the completed listings and the prices that were paid.
I can tell you from this experience that people pay. The bids are not joke bids. They are people who are willing to pay market rate for high demand items because they want them now. God bless them. Furthermore, you can require payment before purchase.
It's not a tremendous amount of money but if you sell a few $300 systems for 2-3x the original price and you're a college student or such, it adds up fast.
The last time I tried doing it was for the limited edition pikachu 3DS; upon seeing a line of 50+ people in Oakland (most of which probably had the same intention as me), I decided that the gain was not worth it anymore.
One popular reason may be "boosting" the auction. A common practice is that when someone puts an item for sale as an auction, they will ask a friend to bid on that item when the auction seems to be settling on too low a price. If it happens that after one of such boosts nobody else bids and the friend ends up winning, the friend will just pick "personal collection"/"cash on delivery" as payment/delivery options and never pick the item up; the original owner will wait few days and post the item on an auction again.
See Cialdini's Influence.
Disclosure: I did it in college for beer money - http://www.nytimes.com/2000/12/17/us/sony-toy-is-less-costly...
Actually Amazon itself has listing from 3rd party sellers at crazy prices.
I was tempted to buy one, even at ~£70. Then I looked at my desk and saw my Rapsberry Pi with this case http://www.ebay.co.uk/itm/3D-Printed-NES-inspired-Raspberry-... and a USB NES control replica and decided to forget about the mini NES.
I mean, how many would they have made? 2,000?
They know they can do a second run before Christmas. By then they would know if they should make 20,000 or 200,000...
Eric Clark's book "The Real Toy Story" goes into the origin of this and other trends [1]. Nobody is really wild about the idea, but the industry is kind of forced into it because sales are literally all within a 3 week period. Miss it and you're dead. Tactics like the 'high demand, low availability' hot Christmas toy are a matter of survival.
[1] https://www.amazon.com/Real-Toy-Story-Ruthless-Consumers/dp/...
Source: I was manager at a large store.
My best guess is that they are shown a working prototype, but for a company this huge (and protective) I don't know.
It spreads demand out over time and over their product line. Similar strategy as how airlines advertise cheap fares to get you to fly on them, but then offer upgrades, early-bird check-in, more leg-room, additional checked bags, alcohol on the plane, etc. to make money once they have your business.
Also, I wouldn't bet on them being more likely to buy a competitor's product. Brand recognition counts for a lot, particularly with toys & other discretionary purchases. Some will, of course, but most people once "primed" will buy something close to what they initially had in mind.
It only works if you have THE hottest toy of the season - something like a product from Star Wars for instance - you create intense demand for the product but limit availability. Simultaneously you provide alternative, inferior substitute product(s) in the same franchise that's less desirable.
The parent HAS to get their child something for Christmas. The child is primed to want the desirable product. The parent drives over town looking for it. Exhausted settles on the substitute product with the promise the child will get the 'real' product after Christmas. The parent spends $50 on the substitute product before Christmas and $70 on the desirable product after Christmas. This nets the toy company $120 so they come out ahead rather than just making $70 had they stocked a large inventory of the desirable product.
Again. It reads like a conspiracy theory. I was surprised to find out it wasn't.
I'm not sure what makes this a conspiracy. It's a producer deciding managing supply of their product to maximize total revenue—not colluding and not doing anything sinister. It's capitalism 101.
Since, as you are implicitly observing, Nintendo itself doesn't have one available, I would agree with your implicit argument that this effect probably doesn't apply here.
But it's still at least an interesting thing to learn about. It really recontextualized some things from my childhood, and forced me to reconsider the fact that sometimes, yeah, it really is a straight-up conspiracy. I mean, yes, there's a danger in reaching for that explanation too quickly, but on the other hand, you can't dismiss it out-of-hand either.
Still, in the absence of an obvious "part two" for Nintendo, I would expect that Nintendo has simply had a hard time calibrating demand for this product. I don't blame them, because it seems like I've certainly seen things that the Internet seems to go gaga over, but nobody actually buys them in any quantity. There's a huge amount of variance I'd expect from their analysis; this could sell anywhere from half as well as the original Nintendo to "a couple thousand units".
I'm imagining at least an order of magnitude more ballpark-judging by $60 price point and tooling costs for enclosure molds alone.
Drop shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customerThe key to this hustle is to never tell your friends that you got one because their con of 'it's for my kids' is incessant.
Looking at some of the eBay sales data already a few have gone for over 600.
Yay for me!
In the end, I think these scalpers won't sell for 8x because anintendo will just pump out more product. Still, it is sad to see this happen.
This type of behavior is literally all around us. I recently listened to a podcast about this exact phenomenon. It featured a couple that had a special rug that drove cats crazy. They sold it on amazon for ~$35. A bunch of people bought them up and sold them on ebay for a lot more, using the drop-ship method (the reseller ordered it using their amazon account with the buyers shipping address).
When people realized they were being ripped off, they returned it to the original seller, who had to handle the claims due to requirements by amazon. They lost 10's of thousands of $$. The creator called some of the people doing this and they laughed him off, telling him they were doing nothing wrong.
It was on planet money's podcast, I think. I can try and find it if you're curious.
[1] Hat tip to patio11: https://news.ycombinator.com/item?id=9087930
> They're likely using one of the world's oldest business models: "Buy things for $1, sell them for $2."
1: http://www.npr.org/sections/money/2016/09/14/493810206/episo...
Another note, Planet Money is pretty much my favourite "always on"* podcast. An podcast about economics might sound dull to some, but what a lot (maybe not on HN) people don't realise is "economics" is a really a study of human behaviour at the macro level, and a large part of human behaviour at the micro level.
* serial was hugely addictive, but it only has short seasons, and each episode had what seemed like a huge wait between them.
This summer, Ruckel tried a new approach: He put his own product on eBay and titled it “All other eBay sellers are fake.” A few weeks later, he stumbled upon an eBay listing with a familiar title. “All other eBay sellers are fake,” it said. It wasn’t his, of course.
Yeah, as long as they were aggressive in making sure there were on multiple marketplaces, and came up first in searches, that would probably be the best response. The bit gain here isn't really the extra sales on the other marketplaces, it's the reduced returns which eat into their profits.
> Another note, Planet Money is pretty much my favourite "always on"* podcast. An podcast about economics might sound dull to some, but what a lot (maybe not on HN) people don't realise is "economics" is a really a study of human behaviour at the macro level, and a large part of human behaviour at the micro level.
Also one of my favorites. I also enjoy Freakonomics. For anyone that enjoys well produced podcasts, I highly recommend just about everything Gimlet Media produces. It was founded by one of the original founders of Planet Money (Alex Blumberg), and they've gotten quite few NPR alumni at this point (mostly from This American Life, which is basically a expert podcast production training ground at this point, Planet Money spawned from that as well). My current favorites are:
- Startup - Excellent. They've gone through a few seasons now. I recommend starting at the beginning.
- Reply All - For the most part excellent. They occasionally to into weird territory, but I laugh during their episodes quite often. The interplay between the hosts is great. Like friends that are kind of assholes to each other because they've been friends for so long, and you get a front row seat.
- Science Vs - A new favorite of mine. At first I wasn't sure what to make of the delivery, which is very campy, but now I think it's perfect for what can be fairly dry subject matter.
- Heavyweight - If you know who Jonathan Goldstein is, or have listened to This American Life enough to recognize his voice (and if you've heard it before, you probably will), you'll have a good idea of what you're in for. I recommend starting with Episode #2 to see if you like it, because it's amazing in both the names involved and the audacity of the idea. That said, I did tear up at the end of #1, as I have brothers of my own.
- Mystery Show - Also excellent, but no longer continuing. Another TIL alumni, Starlee Kine.
There's others in there too, which are all fairly good, but these, along with a smattering of others[1] I listen to are more than enough for me to handle. That said, Gimlet does have a triplet of new shows for their "fall lineup"[2], and some of those sound great too. Okay, that's enough about Gimlet, I've just been really happy about the quality of podcasts lately, and they've contributed a lot to that I think. Radiotopia seems to be the other (different) group that's got some quality content.
It's kind of amazing that since I only really listen to them when in the car, I sometimes look forward to running errands just so I get a few more minutes in to listen.
1: 99% Invisible, Criminal (I believe Gimlet hired one of the founders of this for one of their new shows), Real Time with Bill Maher, Still Untitled: The Adam Savage Project, The Memory Palace.
2: https://gimletmedia.com/2016/11/01/introducing-gimlets-fall-...
With supply limited like this, the optimal social outcome is for the X units produced to go to the X people in the world who would value them most, in other words the people who would be willing to pay the most (only exception I can think of to this is if someone values it at V dollars and only has a net worth of W dollars where W < V, but for the sums we're talking about with the NES I think almost everyone either has or can scrounge up V).
In the final accounting with reselling on amazon, the goods end up where they are most highly valued. Sure, if we held a lottery to see who gets to buy the NESs at the sticker price rather than auctioning them, the people winning the lottery would be more happy than the people who end up winning the auction. But as a whole, society would be impoverished since it's an inefficient distribution (no room to prove it in a HN post, but it's not too hard to work out on paper when tallying up the welfare of nintendo, the scalpers and all the people who get to buy the NES under one scenario or the other).
I don't need to prove my knowledge to you by pointing out lots of capitalism's flaws. Instead of reading my comment carefully, you decided to teach me about how basic supply and demand operate. Jesus, you are a self-absorbed piece of work.
Anyways, why do you think that, given all that, scalping is a bad thing then? Isn't getting the goods to where they're valued most a good thing? Who's getting heartbroken here? The people who can't afford one at the market price of $600? But most of them weren't going to get one anyways because of the limited supply. If there's something to not like it's the scarcity, right?
NO SCALPING
Original seller gets: 1x price
Customer pays: 1x price
5x SCALPING
Original seller gets: 1x price
Reseller gets: 4x price
Customer pays: 5x price
There are other arguments for and against to be made, but I think this one is enough to see why many people - myself included - find this practice distasteful and antisocial.
Once we accept that the welfare of resellers matters just as much as customers, it's clear that the situation is not strictly worse with scalping.
As you helpfully tallied up there, the gains and losses of everyone involved is the same in terms of money changing hand in either case, but in the latter case of scalping, the world is richer, because in addition to the money you paid or lost, people in the world who have an NES celebrate it to the degree they like the NES. And that has to be higher for the people who won it via auction rather than blind luck.
I can see an objection coming, and that's that in the real world it's not blind luck, since often the people in a no scalping world camp out for days to try and be the winners of the lottery. But this is not a good outcome, because while this does mean that the people who value the NES most will tend to get it, it also leads to ruinous competition in terms of who is willing to spend the most time in line. The hours wasted to the line have to then be counted as a negative in the tally and that makes that option arguably worse than the blind lotto and certainly worse than the auction.
The customer is also not forced to pay anything. There is typically a short timeframe where the items are out of stock.
I personally find tons of value in scalping. I've done it myself with tickets, and bought tickets in the same manner. It lets me trade time (waiting at a website or in line) for money.
Scalpers also make it easier to buy the product; without scalping one can not be sure whether one will get the product or not.
Personally I like scalping because I can almost always buy what I want as opposed to no option. It has always worked out well for tickets and items.
A proper capitalist system for an event like a concert would have everybody enter bids for the seats, and once the venue fills up (or on the date of the event) the seats are assigned based on the bids. Of course if you're poor and the event is popular then capitalism says you're SOL. Money is everything and without money you are nothing.
One nice thing about this system is that prices are set by the people, not by the venue. People pay exactly what they think the performance is worth and no more. Artists get direct feedback as to how popular their act is.
(See also: https://www.currentaffairs.org/2016/10/do-economists-actuall..., http://www.demos.org/blog/12/23/14/when-inequality-ruins-ana..., http://www.interfluidity.com/v2/5822.html, and http://www.interfluidity.com/v2/5117.html for more on this same point)
What's wrong with a smart and clever individual buying this to resell at 8x? It's not hurting anyone, it's just a stupid retro console.
What's wrong with society? People are struggling and getting screwed over by governments and big business, they badly need income and here is a small opportunity to get a piece of that pie.
Ultimately someone that wants the product who is happy to pay the price that it is sold for, because they deem it worth that price, ends up with the product in there life. And someone else manages to profit to, to gain some much needed income so they can purchase something they want in there life.
Hardly morally bankrupt. There is no change in the outcome here. There are still the same amount of people with these consoles, enjoying them as before. Nobody is hurt.
In fact you could argue that someone doing this is a net gain, because two people gain instead of one. Someone made a profit that wouldn't otherwise and someone got the console they wanted (and obviously didn't care about the price)
Also, I don't think the nature of the product has any influence on the morals of the practice, I find it despicable no matter what is being sold.
Nintendo for some reason sold a too low quantity, and now the price is high, as denoted by Basic Economics. Its not like this was free money for the scalpers, they took a risk and estimates the demand for the product.
Now people who want it the most, can get it. Those who dont want it that mucj, dont get it. Its absolutely logical, and in no way immoral.
The ultimate arbitrage, after all, is communism, where a central actor soaks up all the profits, and then is left with the responsibility of figuring out who should make more of what themselves, because hell if the producers know.
The market way to handle a small supply of a popular product is to charge a high price, so that purchases equal production. All the compensation goes to the people who created the value, and the people who value the product the most are the ones who are able to obtain it.
Of course, Nintendo doesn't want to charge $1,200 (or whatever) for this product, because it would make people upset. So they set an artificially low price and deal with shortages for a while. Or maybe the shortages are a feature, driving demand through perceived social pressure.
They're certainly allowed to do that. But that's Nintendo screwing with the market and trying to defy economics. Arbitrageurs are just putting things back the way they would naturally be.
Note how companies and industries which are not afraid to charge high prices for products in high demand rarely suffer from scalpers.
It's hurting the people who are forced to pay $600 for a $60 item because they need one (e.g. a must-have gift for someone).
It's hurting the people who wanted to buy one for $60 but cannot afford to buy one for $600.
So yeah, it's hurting basically everybody who had any interest in buying the product.
LOL at the privilege of this being a real problem for someone. If we were talking about price gouging on food, medicine, or housing then I might agree with you. But luxury gifts? Come on, man.
> It's hurting the people who wanted to buy one for $60 but cannot afford to buy one for $600.
LOL at the idea that they can't just wait for them to manufacture more of them. I mean, the games have been out for nearly 30 years now, right?
Assuming more are eventually manufactured, which many hope to be the case...in this instance.
On a related personal note roughly 5 years ago, HP released a limited edition of their 15c RPN scientific calculator[1], which promptly sold out and found their way on eBay listing for $100s more. Despite popular demand, HP never manufactured more. I was lucky enough to acquire two units direct from HP at original cost and actively use one--along with a 35s--on a daily basis; the second is a spare that I refuse to part with.
The moral bankruptcy manifests in a willingness to acknowledge that this behavior is unacceptable were the product "food, medicine, or housing" or any commodity that is generally classified as a necessity. In my eyes, the principle of the matter cannot discriminate.
[1] http://h10010.www1.hp.com/wwpc/pscmisc/vac/us/product_pdfs/1...
I see no problem with having different standards for necessities than for luxuries. We'd consider it morally reprehensible to deny food to a poor person, but few people have a problem denying yachts to a poor person.
The point of bringing up the 15c instance was to highlight the apparent assumption that manufacturer supply always trend consumer demand. A large portion of the user community knew in advance that the 15c would be limited release...but so did scalpers as hundreds of units were immediately relisted at super-inflated prices on zero-day. In the end, it's the user community for which the product was intending to target who ultimately loses...which inflames the compromise that I've made in my mind between a legit business incentive to make a fair profit and an underlying hacker ethos.
Furthermore, scalpers have nothing invested in the creation of the end-product, nor do they ever intend to use it, nor is there any value added to their super-inflated relist price, nor do they share in the business risk of bring the product to market. Profiteering is their strict modus operandi. Although it's certainly delusional to think that these bad apples could ever be done away with completely, I think it's equally asinine to point fingers at an OEM (who has invested in and owns the IP rights) without having first excercised due diligence in holding scalpers who are demonstrably contributing to the supply problem publicly accountable for their actions, if only on a moral note. The problem becomes even more exacerbated when technology enables independent scalpers to gain critical mass on a scale that can nerf an entire production lot. It's unfortunate that the only real action the public can take is inaction against scalper relists...it's even more unfortunate that real consequences are practically nonexistent.
What isn't being acknowledged is the very real risk that any company faces with bringing a hardware product to market at scale. Saturate the market with the intent of deterring scalpers and your unsold investment sits in a storage warehouse costing you untold amounts collecting dust. Increase unit cost on the next product lot and suffer consumer outrage. Set the initial cost beyond reasonable profit and you're in price gouging territory. Assuming a sustainable business model, where's the incentive? Again, it's the user community who ultimately loses to the true vectoralist scalper.
The food vs. yacht analogy appears to dismiss reality. In a zero-sum game, the unit cost of a yacht commands a ballpark 6-8 orders of magnitude delta over food. As a society, we indirectly deny poor people yachts on the merit of economic sensibility, not because it's a social luxury; simply replace yacht with a scaleable luxury like cell phone or computer. The notion of an alternative "affordable yacht" is an oxymoron and subjectively exclusive to the wealthy.
They've added a lot of value for people who really wanted the console to the extent that they were willing to simply pay $600 for it. Those people can now buy the console rather than having to dick around with the limited supply and hope they were lucky. Trade creates wealth, just as if they'd e.g. imported a product to somewhere where it's not normally sold.
> The food vs. yacht analogy appears to dismiss reality. In a zero-sum game, the unit cost of a yacht commands a ballpark 6-8 orders of magnitude delta over food. As a society, we indirectly deny poor people yachts on the merit of economic sensibility, not because it's a social luxury; simply replace yacht with a scaleable luxury like cell phone or computer. The notion of an alternative "affordable yacht" is an oxymoron and subjectively exclusive to the wealthy.
We're talking about a videogame console here - and not even a value-for-money one, it's been a gimmick from the start.
There is no value added when product scarcity is artificially promulgated by scalpers with no end-use intent. You've made the assumption that the supply status quo would exist without scaplers actively exploiting the market en masse, and I beg to differ...the difference is, as of this minute, I can point to over 5,600 reasons on eBay US alone[1] that support my argument.
You've clearly defined the value added in importing a product to a market where it's not normally sold: work which directly increases product availability. Scalpers do neither and instead play an unaccountable game of double penetration: first by creating artificial scarcity in the market, then again by immediately relisting at 10-fold markup within the very same market they've negated.
> We're talking about a videogame console here - and not even a value-for-money one, it's been a gimmick from the start.
Irrelevant. You are, of course, entitled to your own valuation of the product. Nintendo--who has made real investments in and rightfully owns the IP rights to--on the other hand, has clearly valued it at $60 for its end user, profit markups at the OEM and authorized distributor levels included. Scalpers do nothing more than profiteer, costing legitimate end users a proverbial shit ton more to acquire, and soiling the public image of a company which clearly intended to do well with its end users. On that note, I'll gladly take the time to piss all over the corn flakes of scalpers, the true root cause of this problem.
The scalpers don't destroy the consoles any more than they create them. All they're doing is spreading out the supply over maybe a few weeks - they'll be pricing them to sell before the next shipment from Nintendo arrives. Or else they've made a mistake and are going to lose money for it, which is fine too. Maybe some scalpers are holding onto them for the Christmas rush, but that's just the difference between the console sitting on the scalper's shelf or sitting in a box under the tree - it makes no odds either way.
> You've clearly defined the value added in importing a product to a market where it's not normally sold: work which directly increases product availability.
Scalpers are just import/export across time rather than across space. If it weren't for scalpers there wouldn't be any of this console on sale right now, it'd just be sold out everywhere.
> Scalpers do neither and instead play an unaccountable game of double penetration: first by creating artificial scarcity in the market, then again by immediately relisting at 10-fold markup within the very same market they've negated.
I very much doubt the scarcity is artificial. Scalping is too competitive, too easy a market to enter, for anyone to be cornering the market.
> Irrelevant. You are, of course, entitled to your own valuation of the product.
My point is that it's yacht-like (or, sure, like a $60 trinket rather than a $60k one - let's say a Mont Blanc notebook) rather than food-like. No-one physically needs it, no-one deserves it at a below-market price.
> Nintendo--who has made real investments in and rightfully owns the IP rights to--on the other hand, has clearly valued it at $60 for its end user, profit markups at the OEM and authorized distributor levels included.
Nintendo (who FWIW are notorious for price-fixing and bullying retailers, "losing" shipments for those who don't cooperate) don't get to choose how much people buy or sell the products they own for; it's a free country. If Nintendo can really produce it for less than $60 then they should be selling it for $60 and making money. But they've sold all their stock, and the demand is still there.
I remember stumbling on this HP calculator many years ago and struggling to use it for simple infix arithmetic not knowing it was an RPN calculator.
As for the NES system, what we have are people taking advantage of what is likely a short term supply problem. The cost of these systems is really a premium on people who are not willing to wait for more to come, since I think it's likely that Nintendo will make more.
History tells us that HP made a very clear investment bringing the original 15c to market; it's their IP and their prerogative. I simply can't find reason to fault HP for their business decision, which was likely driven by overall product relevance than cannibalizing sales; 33s and 35s were the only other RPN scientific alternatives at the time, and they're both quite distinct from the 15c. In today's age of touchscreen smart phone proliferation, affordable licensed emulators[1][2] which scale to screen fill that void elegantly...unless you're a modern 20-something-ish Luddite like myself and still don't own a smartphone.
[1] https://play.google.com/store/apps/details?id=com.hp.hp15c15...
[2] https://itunes.apple.com/us/app/hewlett-packard-15c-scientif...
If you are so bothered by having to wait for them to come back onto the market at $60 that it hurts you (as opposed to, say, just being a minor annoyance), perhaps you need to stop and question the nature of your relationship with yourself.
Nobody needs it to survive. Nobody must give it to someone else. Those who find it worth $600 have the opportunity to buy one, rather than not getting one because they sold out too fast. And there's nothing stopping Nintendo from making more until everyone willing to buy it at $60 (if only to turn around and resell it for 10x) gets one.
I'm tempted to call this a "0th world problem". It's a game. You'll live without it, or at least until you can buy one for list price. Heck, wait a little longer and you can get one for $10.
In this particular case, the $60 NES Classic is already a luxury good. Marking it up 10x doesn't make it more of a luxury good, it just either means people who actually want to use the damn thing can't afford to, or must pay exorbitant prices.
You would be surprised.
Edit: here's the Planet Money podcast episode I heard about them on: http://www.npr.org/sections/money/2015/12/25/460870534/episo...
Imagine a world where all concert tickets, no matter where in the stadium they are, cost $60. Imagine that there is no such thing as arbitrage. Obviously, in such a world, the tickets for the best seats will sell out first, since they're the most valuable. But they won't necessarily be well-allocated; they might be sold to people who don't actually care much about where they sit.
Now, introduce arbitrage (i.e. scalpers.) Suddenly, the tickets for the good seats, that are worth more than $60, are able to have that information built into their price. Now people who value seeing the concert from the best seats at $120, won't lose out to people who only valued those same seats at $60, but happened to get there first.
The people who are willing to pay $120, of course, might just be twice as rich, and therefore have about the same utility calculus as the people willing to spend $60 (i.e. it doesn't matter which of the two get the ticket.) But assuming two people with the same income, the one who is willing to pay more should get the ticket. They're willing to trade more of their happiness for it, so it probably will make them more happy.
---
In the case of something like concert tickets, the way to fix this is for the producer themselves to price things at the prices the market will bear, such that they serve the role for the market that scalpers would do otherwise. To soak up all the arbitrage-able value themselves.
But in cases that aren't like concert tickets—and consumer electronics certainly qualifies—the "right thing to do" is to just make more of the thing. Scalpers don't exist when a company is relying on unit economics of profit margins for their total profits, and will gladly up supply to meet demand (and will also attempt to predict initial demand, and bring initial supply online so as to meet that as well.)
Companies can choose not to do this, of course. Mainly, companies avoid doing this because their profits aren't built around unit economics. Neither Prada bags nor Magic: The Gathering "legendary" cards are produced to meet demand; they're instead produced to be fought over.
But if the company does build their profits on unit economics, then that leaves you with two options for why they're 'underproducing': either they have to, because they have a tight logistics pipeline and the product wouldn't be revenue-positive if they made that pipeline "wider" for the sake of higher initial production (as happens with each new iPhone); or they're just doing it to have some of the "cachet" of the collector's items rub off on them.
In both cases arbitrage will necessarily happen. In the first case, the company themselves are mostly blameless. In the second, it's entirely the company's "fault" that people are paying $600.
Either way, this arbitrage is still helping consumers—at the expense of the company. But when it's done for cachet, it's certainly a "hoist by their own petard" sort of situation: the company are throwing away money they could have made, and letting scalpers pick it up, all for the sake of signalling (advertising) that they're a classy company (which—if people don't already believe this, they're not likely to start just because of one event like this.)
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Mind you, Nintendo is probably in the former category, not the latter. The production run for the Classic NES is probably on a minimal pipeline, designed to not leave Nintendo with any units left over once the buying is done.
Adding arbitrage just makes this process more efficient, by allowing the richer consumers to express their desires directly, rather than having to hire someone (or, more likely, pay a service to hire someone, or use someone they already retain for miscellaneous tasks) to spend their time (exchanged for money) to acquire the good. Either way, richer consumers will preferentially acquire goods in a market; that's one of the fundamental properties of markets, and can't really be divorced from them.
In the mean time, you can remedy the hurt with an SD card, and a Raspberry Pi Zero that you could buy at the nearest MicroCenter for the price of 0.99 and half an hour of loading RetroPie on it.
Investing money in something that is nigh-guaranteed to have excellent returns is very good sense for anyone with the time and effort to spend on reselling the product.
When this pricing mismatch happens, there is the ability to close the pricing gap through repricing by a third party otherwise known as arbitrage.
This is one of the more important functional requirements for a market and the producer can take advantage of this based on how they price. Nintendo could have priced the system much higher and seen the same output but it may not have made as big if a splash, so really it's Nintendo driving this frenzy because they and all other major companies are good at this.
It's not a big it's a feature (really in this case).
They have slow production on purpose. If you could walk into any store and get one, it wouldn't be nearly as big a deal.
Best case scenario, a week or two after launch, the vast majority of that capacity would be sitting idle after the initial rush is over and the purchase rate tapers off. Worst case scenario, the product isn't as popular as you anticipated and you've got a big ol' writedown to deal with. (Atari anyone? Blackberry tablet?)
The winners are Nintendo, who gets sales in the 1Q, which is normally death for this kind of product, and the retailers, who get parents visiting daily and buying other crap.
My brother spent weeks looking for the "cream pie in the face game" last year. In the process, he picked up a half dozen other board games.
I don't know, but I shun, punish (by refusing to do business with them) and counter-market such people whenever I can. It's one thing to take a good and resell it for a larger price to a different audience; you're in essence making it more accessible and also take on some distribution headache, and thus deserve to cash in. That's how almost every brick and mortar store works. But it's another thing to buy off someone's stock only to turn around and resell it for more to the same customer base. That's, in my opinion, just plain sliminess.
Morally? It's a video game. Scalpers are fine. Blame Nintendo for not making more of them or charging a higher price so the limited supply met demand. Everyone will have their NES Classic in a month or two.
People get very morally righteous about scalping, but I don't understand why at all. Resellers are correcting a distortion in the market and providing a value-added service.
How it normally works is this:
* Some person sells something locally for $x
* There is demand outside that location for the same product
* Someone buys the product locally for $x and sells it elsewhere for $y > $x
* Customers are provided access to a product they would otherwise not be aware of or not have access to, the reseller makes money from the margin, the producer can produce and sell more product, everybody wins
How it works in this case:
* Some person sells something for price $x at a limited quantity
* Someone buys up all the product for $x and resells it for $y > $x
* Customers are prevented from accessing the product at the original price, the reseller makes money from the margin, the producer doesn't gain any advantage, only the reseller wins
Can you honestly not see how this is different? It's morally bankrupt because it offers no value to anyone and entirely profits from the charity of the producer who sells a product below market value. And in the worst case the reseller ends up with tons of unsold product and is forced to dump it later or even throw it away completely (which depending on the margins may still turn a profit overall).
Or why not first release an expensive limited edition while they scale up production?
I've wondered why retailers don't do the following: set MSRP to $X, but charge $X + $Y, but donate $Y to charity, and advertise the fact. This is basically a variation of bundling, except people aren't too happy about that, either. It's easy to be emotional about greedy scalpers or greedy retailers (that forces me to buy $Y of crap), but most people don't think of greed and, say children dying of cancer, in the same train of thought.
"Raise prices" is not the solution to all of life's problems.
Nintendo has to pick a price for the long term, ship with it and stick with it. Short term profit opportunities would have a very large long term cost.
It was about 8 years between 1st gen consoles (Atari, Intellivision, Colecovision) and 2nd gen (Nintendo). The retro-rerelease of 1st gen was about 8 years ago. I am 45 and am nostalgic about 1st gen. I was in high school for 2nd gen; no nostalgia, uninterested.
So do these retro-rerelease target those in their late 30's. Mid life crisis yearning for nostalgia?
Objectively, (if you put a complete novice kid in front of a console), NES and SNES's good/great games are the best.
There's ones for Intellivision (https://www.amazon.com/IntelliVision-AtGames-Flashback-Class... ) and Colecovision ( https://www.amazon.com/ColecoVision-AtGames-Flashback-Classi... ) too, but those have only been available for the last few years.
It seems like Amazon could come up with many other ideas for allocating a limited product. There's no rule that says it has to be based on the millisecond ordered.
For example how about a game of chance (or skill?) to let people compete for the product? It would feel a lot more fulfilling than an error page. And it would give them good brand interaction.
That's just causing hassle, distrust. Retail employees probably don't lke to get 50 extra calls a day for a product that will be in stock for 14 seconds. If I were a regional mgr I'd put VERY heavy pressure on corporate for say Target to NOT show ads for this product until reasonable levels of stock are guaranteed. Targets around the country got about 11 units. The one I went to only had 1 spare controller. Keep in mind that a good portion of the NES games are co-op.
There are 1800 target stores in the U.S. If they all got 11 units that means there were only 19,000 units for that store. I heard gamestops got about 5. Walmarts got about 6 units each.
So 6 units to walmarts 5229 stores is about 31375 unit. Gamestops 4,434 stores at 5 units each get 21700
Who knows what amazon stocked at. Would it be reasonable to say amazon got 10000 units? I mean they sold out in a minute. Maybe it was less than that.
So those totals add up to 82,075 units. Let's round up, not forgetting the Best Buys, Microcenters, mom-pop shops and The 800 Toys R Us stores in the U.S. and say the United States got maybe 112,000 units total for the release.
You are driving me insane! Go outside and play.
There will be limited availability for a short time, then a flood of product.
I'm still impressed that my mom somehow managed to get me an n64 for that first Christmas they were available! I was in disbelief since I was certain they were impossible to get. 13yo me had all the local toy store #s memorized and I'd call every day asking if they received any shipments. No dice.
Shadows of the Empire on Christmas morning was so awesome! Tripping up those AT-ATs that morning was one of the more memorable moments in my gaming history.
A few months prior, for my best friend's September birthday, his mom took us to Toysrus and let him pick either the just released n64 +1 game OR the on-sale SegaCD and a bunch of games. He chose... poorly.
This is the headline I am seeing at the moment. Seems like the guy who was supposed to update the time forgot to do so.
At an impulse buy price point, I wonder how many unrecoverable lost sales are caused by lack of supply.
(I know I've posted lakka twice in this thread, but I'm not affiliated, just a happy user)
From that perspective, having short supply on release day seems like a decent plan. Once they get the publicity, I bet the supply increases to match demand within the following month.
https://www.aliexpress.com/item/Video-Game-Projector-PGS-Con...
Available cheap for another 8 hours, maybe something to tide them over?
You can make a smaller NES with a Pi Zero and rented time on a 3D printer. I don't think people would have a problem trading use of cartridges for a much larger, cross platform selection.
Is this a business opportunity?
[EDIT] links:
Which romsets to use for various systems:
Is demand really high enough to support a higher price? Nintendo is infamous for putting out a short supply.
I don't understand why Amazon can't just take preorders for the next batch.
Nintendowned: Amazon sells out of the NES Classic Edition in (null) seconds
i am pretty sure the site was hit so hard they just 404'd the URL so it wouldn't load anything. for a while the item page was blank while amazon.com continued to load.
- You can enter the item lottery for a longer period (e.g. 60 minutes).
- Lottery winners are picked at random, not based on entry time.
- Max one entry per household (remove entries with duplicate mailing addresses, duplicate credit cards, and duplicate email addresses).
- Once someone wins they have a window to purchase (e.g. 3 hours). If they fail to purchase then the lottery picks a new winner.
Now obviously cheats will still exist, but at least they're all on a fairer playing field with normal purchasers.
I even got an impression from their nes classic page like they were saying "meh, we are not really sure if we sell this why do you want it"
I know some places already do this: x.ai comes to mind. They even had a thing where you could move yourself up in the queue by getting others to sign up.
Want the next 911 GT3 RS? The best way to guarantee you get one is to give a dealer a deposit (usually just $5000) for "the next GT3 RS" at least 3 years before the vehicle is officially announced. You do have to wait for that dealer to get an allocation (so often you'll place a deposit with multiple dealers who sell a lot of 911s), but when they pop you get yours assuming you were early enough in line. A few long-term repeat customers may get bumped ahead of you in line, but at the end of the day you'll get your car.
There was a lot of anger at the availability of the Cayman GT4, but despite never being a prior Porsche owner I had the opportunity to pass on it twice (for a much harder to get Boxster Spyder) because I knew how the process went, and had deposits for non-existant cars with multiple dealers years before they were announced.
It worked in the USSR because USSR.