by Doc – Owner, Founder, Probably Brilliant Economist Who Wastes His Time On Amiibo
Since Day Damn One of amiibo’s existence, there’s been major supply shortages and, as a result, amiibo scalping. I can’t blame the scalpers one bit – if I knew for a fact that there was an investment that would triple my money in a single week, I’d invest too. However, it’s a downright nasty thing to do, so let’s put our noggins together and put a stop to it.
The Amiibo Economy
As with all products, amiibo value is based off of their demand in relation to the available supply. Click that linked article if you’re not sure what I’m talking about.
Basically, amiibo get their demand from two types of fans:
- Amiibo collectors – people who try to buy most or every amiibo release for their collection
- Amiibo users – people who buy amiibo to use them in specific games
And amiibo are supplied from two suppliers:
- Nintendo (obviously)
- Fanmade amiibo
If Nintendo oversupplies an amiibo, the amiibo collectors and users can buy it easily, and for its normal value. If Nintendo undersupplies an amiibo, fans on Etsy manufacture amiibo cards to meet a small portion of the supply. It’s relatively straightforward.
Supply-Side Amiibonomics
Nintendo, as we’ve said, is a chronic undersupplier of amiibo. It’s easy to see why: amiibo are very high quality figures, and their demand largely stems from unpredictable factors like game sales. Historically, manufacturing amiibo takes several months, if not a year of advance planning. This means that every single amiibo release or restock has to take into account an unknowable amount of unknowable factors over a long span of time. Who could have predicted COVID?
This is not normal for Asian manufacturing – it’s normal for toy manufacturing, but not Asian manufacturing. Most factories in the Asia-Pacific region operate with only a 4- to 6-week period planned out ahead of time (whose reliance on short-term bonds is, incidentally, helping with the major Chinese economic collapse). Nintendo has historically produced their amiibo in Hong Kong, but are almost definitely moving production back to Japanese shores as part of the “Japanese Manufacturing Subsidy Policy”. So we can still assume that they’re operating on the Asian manufacturing standards.
Toy manufacturing, on the other hand, is planned pretty far in advance, because toys are subject to significantly more regulations and craftsmanship requirements. Nintendo clearly puts a lot of work into quality assurance for amiibo, going so far as to hand-paint them to a degree. I have no doubt that this adds much, much more production time to their already-long process, and it seems reasonable that this would play a part in the lack of supply – there’s only so much time to make amiibo.
So here’s how you solve all that.
Official Amiibo Cards
Nintendo is no stranger to producing its own amiibo cards, and has produced nearly a dozen series of them. These amiibo cards are just like the ones you see on Etsy – pieces of thin paper-plastic with the chip inside. They’re cheap, easy to manufacture by the million, and don’t require significant production time.
Nintendo should produce identically-functioning amiibo cards to supplement its short supply of amiibo figures, and release these cards 1-2 weeks after each amiibo’s release.
This possibility solves the problems that amiibo’s current supply scheme has left. It satisfies the people who buy amiibo for their function, not the figure (and also scoops up a large portion of the secondhand amiibo market, which probably comes to millions of dollars). This means that Nintendo doesn’t need to produce as many figures, resolving the figure supply issue – which also allows them to put resources into producing a larger variety of amiibo.
Once you’ve alleviated the “amiibo users” demand, there’s much less frenzy to buy amiibo figures – after all, so much of the market has been removed. Removing that pressure will allow prices to stay fairly close to MSRP, if not a little bit higher, because amiibo collectors can rest assured that there’s more amiibo available.
This totally removes the incentive structure for scalpers – why would any amiibo user pay $40 for an amiibo figure when they could get the functionality for a few bucks a week later? And the amiibo collectors win too – the collectors will want the amiibo figures, and they don’t have to compete with the amiibo users anymore, so there’s no shortage, and thus plenty of supply for everyone.
And in the event that this doesn’t succeed at removing the shortage, Nintendo only needs to plan a few weeks ahead of time to produce more cards. It may not entirely satisfy the collectors, but it’ll drive down the price of amiibo figures thanks to the availability of substitutes.
Once scalpers realize that amiibo is no longer a useful investment vehicle, they’ll move on.
Amiibo Doctor 