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Friday, March 30, 2018

Why How Much Consoles Sell Matters To YOU!

By LUDWIG VON KOOPA - It makes a big difference in retail and availability.

I've heard lots of people over the years say they are too mature to think about the console wars. What does it matter to them that Nintendo's Wii U was a sales failure? That doesn't impact one's personal enjoyment of it!

I would ignore network effects at your own peril, people. Hitching a ride on a successful console car (as long as it's not a train) has a lot of benefits. I'll outline three of them in this article. The last one is the real reason this article was written. The first two are just for narrative build-up. ...Building away!

More People to Play With!


This is the most obvious application of network effects. In a world where most multiplayer games are locked to the console they are on (no cross-play), getting all your friends to be on the same console as you is pretty important. If they don't have that console, you don't get to play with them. Then you'll have to make another group of friends. For a lot of gamers, doing that is tough stuff. And you'll get estranged from your first group of friends.

Console popularity and consolidation saves relationships.

I mean, why do you think Wendy doesn't do anything on the site? She hasn't had a Nintendo console in, like, decades.

But what if you don't play games with friends? What if you play games by yourself?


More Games to Play!


Developers want to make games for consoles that have a big enough install base to make it worth it. That's why you see developers port games all the time between different consoles, even after declaring them exclusive. The sweet spot, which is what the Nintendo Switch has had and arguably still does, is when you have an active, hungry customer base and not enough games to satisfy them. That attracts developers who hedge their bets that, hey, if a certain percent of this segment of the base buys the game, it'll be enough to be profitable.

This goes for games across all kinds of genres. You can have a niche, quick and dirty virtual novel, but you'll still need some bare minimum of people to buy it.

You know all that already, don't you? Well, here's some pretty insight for you. THE THIRD POINT!

More Dedicated Retailer Space


This article is REALLY a masqueraded sequel to the “Ludwig goes shopping at Best Buy” series of articles.

With a popular console, and a popular anything, the number of non-primary-purpose merchandise increases. Yes, more games that sell means that retailers will put more shelf space dedicated to selling through those games, but what happens in this modern day and age where more and more gamers are buying their games digitally? What are you selling in that space?

For the most part, plushies. (...And some amiibo, but the amiibo craze has died down quite a bit from its 2015 peak.)

American angry Kirby plushies squad Best Buy creepy Wario plush Hammer Fighter Sword
Best Buy is suddenly selling several Kirby plushies, as of the release of Kirby Star Allies.
(Plus, creepy Jewish-caricature Wario is photobombing in the background. Happy Passover?)

Plushies are always popular, but they used to be only sold online or in geeky convention booths. Now they're in mainstream retail stores. I attribute this both towards downloadable games — meaning retailers are carrying less physical games — as well as the Nintendo Switch's dominating market position. They need to carry SOMETHING on the shelves, and plushies cannot be digitally downloaded. They make for excellent impulse buys — while buying Kirby Star Allies, I also bought a Paratroopa plushie and a Rowlet plushie. I definitely wasn't planning on doing that. I doubt anyone is going to Best Buy (an electronics store) for the purpose of buying plushies, so anyone buying these — and there are more than before — is doing so out of an impulse decision. Retailers are having high confidence in the attractiveness of Nintendo and other companies’ intellectual property that plushies and other items like those will have a high turnover rate among shoppers, and may even bring in new shoppers or more repeat shoppers.

This is known in industry parlance as the “collectibles” line of business. Collectibles, at least according to Gamestop's financial statements, are a fast-growing and profitable segment of business that helps diversify from just selling hardware and software. In fact, GameStop announced they have double-digit growth (in the 20%s) in the collectibles segment, but they actually expect a reduction in game sales. You should expect more collectibles of different types in the future, and expect what intellectual property you can be collecting to be determined by whatever hardware and software is selling greatly. For the time being, that's Nintendo franchises driven by the Nintendo Switch. (Except ARMS, which finally had zero copies plaguing the shelf.)

The Switch is so successful that they put a small column-shelf at the very front of the store with a WHAT'S NEW sign, and a whole side of it is dedicated to Nintendo Switch software like Kirby Star Allies and Bayonetta 2. That's space that would have never been available to Nintendo if the Switch wasn't so successful. The shopping experience for fans is just that much better now compared to the dark days before of Nintendo having a far-away corner. If you are a heartless monster (or you're too poor to impulsively buy things), then you might not care about collectibles. In that case, more shelf space for games in more prominent locations should still please you and make the case that better-selling consoles benefit you.

Regardless of everything I've written here, I've never seen the Nintendo Entertainment System: NES Classic Edition in stock, despite the supposed restock. Or the Super Nintendo Entertainment System: SNES Classic Edition, despite the supposed much-stock. ...Or where they'd put them if they were in stock. Makes me wonder about where they'll sell the Nintendo Labo!


KoopaTV will be cheerleading for Nintendo's success, regardless of whether Nintendo is actually succeeding or not. No bandwagoning here! It makes for a better shopping experience when things work out, for however long people will still be buying games in physical stores. Have a nice weekend, and feel free to comment how your latest retail shopping experience was.

10 comments :

  1. In my area, I've seen the SNES Classic in stock for several weeks at a Walmart but never the NES Classic. Amiibo, however, are pretty much non-existent in retailers at this point except for a multitude of Animal Crossing amiibo and almost nothing else. With Super Smash Bros. for Switch releasing this year, I would not be surprised if there are restocks of previous characters as well as a few new lines. There is also the possibility that Labo will completely replace the amiibo section if more stock is not added. At this point, it seems like the fate of the figures is uncertain.

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    1. To be specific on the amiibo front, all there are now are Animal Crossing figures and a ton of Breath of the Wild ones, but not of the Four Champions, but the ones of Link and the horse and stuff.

      And a few Kirby series (King Dedede and Kirby).

      Delete
  2. Since Switch sold so well, Activision found it is worthwhile enough to port Crash Trilogy to it which hopefully means Spyro will follow Crash whenever Spyro HD Trilogy will get announced.

    I remember telling someone at an old forum I used to go to that I was okay with KH Dream Drop Distance on the 3DS despite me hating the series because that was early in the 3DS's lifetime and it will help move 3DS sales to then get developers to create games I would actually want on it.

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    Replies
    1. Do you think ports of, say, current-gen games such as Undertale to the Switch would help move Switch sales to get developers to create games I'd actually want?

      Delete
    2. Nearly every gamer has a PC and whoever was interested played Undertale on it. Most people who would own Undertale on the Switch are double dippers who want to give Toby Fox as much money as they can and already owned the Switch and probably won't buy a new Switch just for a PC game unless their PC has terrible specs and needs a devoted console but those might be in the minority.

      KH Dream Drop Distance was a new game for the 3DS and was not previously a port which would move sales. Pretty sure KH3 alone moved sales for the PS4 and Xbox One before even being released.

      Delete
    3. Well, great, then no one can say I don't have a reason to NOT be okay with Undertale on the Switch!

      I wasn't even cognisant that Kingdom Hearts III is releasing on the Xbox One. That's strange to me...

      Delete
    4. Here you go: https://www.amazon.com/Kingdom-Hearts-III-Xbox-One/dp/B00DBF80L2

      Xbox One and PS4 pretty much have the same library at this point. It all comes down to do you support a Japanese or Western console maker when choosing between them.

      Delete
    5. I mean, you could've said that the Xbox family and PlayStation family have pretty much the same library for several years now.

      I predict the Xbox One version will disproportionately sell poorly.

      Delete
  3. I second the statement of more games to play, I'm glad that some popular games did come to Switch, such as Skyrim, Dark Souls and Crash Bandicoot. Of course, beign a well selling console helps a lot in this topic, you get the attention from third party companies and got to get their games, because they want to sell, don't they? Well selling consoles attracts third party companies and developers, which means more diversity of games.

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    Replies
    1. Yeah, there's just a chicken-and-egg situation that I didn't get into in the article that the console manufacturer solves by well-demanded first-party games and paying third-parties financial guarantees.

      Delete

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