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Nintendo, in partnership with Sanrio, released cards for Animal Crossing: New Horizons. Basically, they sell cards with NFC chips in them to make the game attract villagers in the appearance of the Sanrio characters to your island in the game. Why are they bullshit? Because it makes no sense to program chips, print cards, packaging, and ship them around the world for what is essentially a 540 byte file for an Internet-connected game console.
I bought my kid a Switch at the beginning of pandemic lockdown. I bought them Animal Crossing: New Horizons. I set up the Nintendo account for Nintendo store purchases on the console.
Nintendo launched the Sanrio Amiibo character cards, and the kid woke up early to attempt to buy them. Just like NVIDIA GPUs in the hellscape that is this never-ending year, they were sold out within 59 seconds, purchased by bots, and immediately being sold on Ebay for 30 times the price.
What the hell, Nintendo?
When everything is a file, does it make sense to create false scarcity by turning the file into a physical good, unnecessarily?
These cards aren’t special. They carry files that are smaller than 1KB of data. The console is Wi-Fi-connected. There is no real reason the Amiibo files the cards carry can’t be in the Nintendo App Store, for everyone who wants one.
Instead, the files are on cards, shipped from China to distribution centers, from distribution centers to stores, to be sold out to bots, and marked up on the secondary market (eBay and Amazon) from the 6 dollars they’re supposed to cost, up to anywhere between 200 and 1000 dollars.
Did Target fail here?
The first news story shown above by Eric Halliday says Target dropped the ball here.
I disagree. This isn’t Target’s failure: This is Nintendo’s. Nintendo made a virtual item with unlimited availability into a physical one that could become out of stock.
Files can be copied
The natural state of files is that they can be copied. Just opening a file copies it into memory. This is the whole difficulty with DRM (Digital Rights Management), the idea of preventing unauthorized copies.
This gets into the whole notion of, ‘what do you own?’ – can you copy a file that is yours? What is ‘yours’, exactly?
If you make a purchase, can you back it up? Can you resell? Microsoft used to make eBay pull auctions for Office and Windows discs, on the basis that you couldn’t resell the license without their authorization. They don’t do this anymore. It was stupid.
We know that Nintendo could send the Amiibo files over Wi-Fi to the console. Why didn’t they think to do it this way?
Because they’re scared. They’re scared that people could duplicate the files and then they wouldn’t be able to make the sale. Instead, they’ve instead created a situation that rewards scalpers and prevents the characters from the hands of the kids who want to use them. That can’t be in line with Nintendo’s goals, can it?
The goal should be, ‘what is the fastest, most rewarding way to delivery joy?’
Turning a plentiful good into a scarce one has costs
There are really two costs here:
- Unhappy kids and frustrated parents (Nintendo is in the business of making kids happy, why would they incentivize making people frustrated?)
- The logistics and environmental costs of shipping things that don’t need to be shipped
On both counts, Nintendo has created costs that didn’t have to be, because they created a scarcity that had no reason for existing.
