The Wii Shortage, and other Disasters of Toy Economics

Russ Pitts | 19 Nov 2007 17:00
Op-Ed - RSS 2.0

I got a note from a concerned parent over the weekend, while I was debating whether or not to force myself to play enough Kane & Lynch to write a review (the outcome of that debate should be obvious). When I receive a note from a concerned parent, it usually contains the words "negative influence," but this time was different. The concerned parent was wondering if he should hurry to snatch a Wii for their little tots' Christmas present or wait until he gets his holiday bonus. The Little Tots have said all they want this year is a Wii, and it would seem there's a bit of a panic over a possible shortage.


Now a shortage of Wiis isn't news - they've been hard to find since they came out - nor, unfortunately, is a parent-induced holiday shopping panic. Breeders have been suffering anxiety attacks over the latest hot, new toy since Sears & Roebuck started selling Tinkertoys 100 years ago. Why should this year be any different?

I still remember watching news reports on television about mass rioting at the mall over the last, few Cabbage Patch Kids available during the great Cabbage Patch Kid panic of 1982. This was on the national news, mind you. Other interesting news items of note that year included the death of Princess Grace, the conclusion of the Falklands War and the successful implantation of the first artificial heart. But I suppose by December this was all "old news," and whether or not little Jimmy Wetpants would get his hands on a Cabbage Patch was the most pressing concern of the day.

Malls were swamped with shoppers around the clock, parents stood in long lines, in the dead of winter, and store after store began posting notices of their success or failure to procure more of the dolls in the local newspapers. Stores lucky enough to keep the dolls in stock did more business than the town whore at a cowboy convention, and stayed open longer. But there never seemed to be enough of the dolls, and more than a few unlucky parents came home empty-handed.

By late December, supplies were running short, and more than a few late-night Cabbage Patch vigils turned violent as concerned parents fought over the dwindling supply. Competitors began selling knock-offs and unscrupulous hooligans manufactured counterfeits, selling them out of the backs of trucks in mall parking lots (even these were swamped with customers).

Adam Smith
Adam Smith

This was the same year the home videogame market began its spectacular crash, by the way. Spurred by the phenomenal success of Atari's 2600 home console, videogame makers began peddling more and more games, often forgetting to include such things as quality and creativity. By 1982, stores were so full of lousy games - all bearing the Atari name on the box - consumers had a hard time telling the crap games from the not crap games, and so they stopped buying anything at all. Whoops. In an effort to take advantage of the console's enormous install base, developers killed the market, setting back game development almost a decade in the process.

This is how economics works, shoppers being a lot like investors. If there's too much of something, people don't want it as much, and the value of the thing goes down. If there isn't enough, people want it more, and the value goes up. Basic supply and demand, as popularized by Adam Smith. But if you find The Wealth of Nations a bit too dry, Netflix It's a Wonderful Life, starring Jimmy Stewart, for a classic demonstration of economics in motion.

In the film, Stewart plays the owner of a savings & loan in the fictional town of Bedford Falls, which sadly finds itself out of cash. Since Bedford Falls is a small town, word spreads quickly, and people start to worry. They run to the bank to draw out their money before everybody else can draw out their money, in the hopes that, although the bank may be short, they'll at least get theirs, so no harm no foul.

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