In Australia, the NES Classic Edition came out on Thursday - the physical copies at Target etc. too were sold out in minutes, too. Some of the Facebook comments said that their local shop only got a few boxes which were gone mmediately: https://www.facebook.com/NintendoAUNZ/videos/714922218664914...
As usual, Nintendo doesn't get their customers and is completely unprepared.
Doing things for press coverage in order to get an increase in future sales is a great idea for a startup with limited marketing funds, but Nintendo aren't exactly in that position. The fact is Nintendo failed to supply a sufficient amount of their product, and that has created a demand in a secondary market. All of the profit generated in that secondary market would have gone to Nintendo if they'd managed their supply properly.
Unless it's a campain aimed at destroying sales of it's competitors during Christmas season. Remember that announcement for a new console planned for March? That's a startup marketing thing too, right?
> All of the profit generated in that secondary market would have gone to Nintendo if they'd managed their supply properly.
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.
A model against this would be to announce that the first million copies will be at a 50% markup. It would mean that Nintendo (or Apple or whatever consumer-land vendor) can capture the added value, while using moderate production lines, stretching the delivery over time and still get the press releases about "We got our hands over the product, here's what it looks like".
Suppose they contract with the manufacturer to set up 10 production lines to meet initial demand, what happens when demand drops in the New a Year and 'everyon' forgets these exist? They'll have to decommission most of the lines, which also has a cost. Also if they over-supply the initial surge of demand even a little, they could be stuck with months worth of tail end sales. Then what do they do? Decommission all the lines for that time? They'll have to pay for warehousing the product as well. There are a lot of factors to consider, it's not just a matter of magicing up however many units are needed at any given time.
Have you looked at the teardown of what this product actually is? Its using a very cheap Allwinner chip inside a plastic case, a similar board can be had for $7[1]. I highly doubt Nintendo is producing much in house, they probably have PCB manufacturing and final assembly outsourced, there isn't much to this device[2] physically.
Doesn't need, but - if it leads to increase in sales or brand exposure (via increase of press covering the situation) - it may as well engage in such tactics anyway.
But the weird thing about the brand exposure is that before this sale, there was zero advertising - it was all word-of-mouth, without Reddit I wouldn't have even known this thing existed. Nintendo didn't do any advertising in Australia I saw, nothing on TV, at the shops or on buses like it happened with the regular consoles. I don't get it, and press coverage is still minimal outside of the circles that knew about this thing already (tech press).
As usual, Nintendo doesn't get their customers and is completely unprepared.