Will Amiibo lose their charm when you can actually buy them?
One of my all-time favorite developers, Nintendo (NTDOY), has struggled a bit in recent years. With lackluster Wii U sales and the 3DS hitting the end of its lifecycle, many analysts had pegged Nintendo for dead. Then the Amiibo marched in.
Toys-to-Life isn’t new, Activision’s (ACVI) Skylanders have dominated the market for years and Disney’s (DIS) Infinity caught fire by selling beloved characters and famous super heroes. The biggest question before Nintendo launched Amiibo was, “How could they survive such a competitive, expensive market that relied heavily on retail shelf space?” The short answer, limited supply and exclusivity.
A collectors’ market relies heavily on limited availability and high demand. By shorting the amount of Amiibo produced (Nintendo has stated that this was not done on purpose to create demand), limiting which retailers could sell specific units, and having an ever-rotating list of available units, Nintendo was able to dictate exactly how and when Amiibo would be purchased. You can walk into any store today and buy practically every standard variant of the latest Skylander or Infinity character. Yes, they have limited editions as well that are store specific and hard to find. But the average collector or child can get every character they could possibly want for the entire life of the game. This is in stark contrast to Amiibo, which if you didn’t preorder or buy on day one (if you even could) you would miss out on.
Nintendo created a market that urged consumers to buy today, just in case you want to play with that character tomorrow. I missed out on Marth when he first released. And even though he has made several more trips to online stores, I have still been unable to purchase him. Stories just like mine have created a need within the community to jump at any chance to buy an Amiibo. If you find one, it may be the only opportunity you have to get it without paying ridiculous aftermarket prices. Amiibo are now selling through the roof despite having limited playability when compared to its competitors.
This brings me to this weekend and the Retro 3 Pack. Unless you have been gaming since the NES (or before) like me, you may not even know who these characters are. The GameStop where I preordered this weekend had 60 units available. From what I have been hearing, that was about an average number for each of the stores. After the rush, the store I was at had at least half of these still left. This morning, GameStop opened up the preorders to online customers as well. Hours later it’s still up for preorder on their site.
While I wouldn’t expect these to have the same draw as Link or Pit, it’s apparent that Nintendo was able to meet initial preorder demand for this bundle. For consumers, this is great! Anyone who really wants the set has had ample time to put $5 down to secure them. If I was an investor in Nintendo though, I would start to be concerned and pay very close attention to the next few launches. Will Nintendo be able to continue to increase quantity to meet the demand while preserving rarity? My concern is that more units, while awesome for the average collector, will actually decrease the overall demand for Amiibo in the future.
With Mario Maker and Yoshi’s Wooly World, we are starting to see functionality for all of these Amiibo we have been collecting. This could drive demand to new heights, but only if managed correctly.
Image borrowed from Gamespot.com