Are Amiibo the new Beanie Babies?

The year was 1996 and everything was pure. Arcades were booming, the N64 had just been released, the first successful disc-based systems had emerged, and the world was a simple place. Then came along a phenomena. A collector’s dream. Something with no real value that escalated in price over night: Beanie Babies. Produced by Ty, Beanie Babies were basically small stuffed animals that were filled with beads instead of stuffing. For some reason, a marketplace emerged from these toys, which had actually been around since 1993. People would literally line up around stores, hawking retailers for their latest shipment in hopes of getting a “rare” Beanie that was worth hundreds, sometimes thousands, of dollars.

I remember specifically going to retailers with my uncle, who was big into the reselling of Beanie Babies. Because I was only 11 at the time, my small stature made me a perfect candidate to wiggle through lines of middle aged women and fat, greasy resellers, looking for a chance at a Garcia Bear (yes, after the Grateful Dead). Beanie Babies weren’t discontinued, they were “retired,” which gave them even more “value.” While the craze lasted for a few years, it boggles my mind to think of the thousands of dollars that people spent on these items, which are now worth practically nothing to 99% of the world.

Smelly hippie bear!

Does any of this sound familiar?  If you have been following the amiibo craze lately, then yes, it does. A defective Peach selling for 25 grand? Newly released amiibo figures, such as Diddy Kong and Little Mac, selling for 6 times the amount of the initial price just days after launch? “Discontinued” amiibo such as Marth and Wii-Fit Trainer selling for over $100? The amiibo economy has grown into a Beanie Babies-like state over night. So how did this happen?

The first thing is more than likely a “supply and demand” issue. See, Nintendo decided to make an amiibo for every Smash Bros. character, so clearly some would be in a higher demand than others. Who is a more marketable figure: Mario or Wii-Fit Trainer? Would you rather have a Link figure or a character-less “Villager” amiibo? Of course most consumers will pick the more notable Nintendo franchise characters, so Nintendo probably didn’t plan to make many of these less popular figures. What Nintendo didn’t bank on was the collect-ability of not just the main characters, but the lesser known ones as well. “Gotta Catch ‘Em All” extends way past Pokemon for Nintendo, and obviously there is a small contingent of people who want ALL of the amiibo characters.

The infamous trio!

That leads us to the main point: the economy of amiibo. Much like Beanie Babies, the amiibo line has created a marketplace based on an undetermined value that is becoming more and more clear with each passing day. How does the economy work? Simple. It’s consumer-driven prices. If someone is willing to pay $100 for a Marth figure, then why wouldn’t all sellers strive for that price? With defective amiibo selling for thousands, people will increasingly look out for these in order to make the most money. It’s a basic business principle. If someone is willing to pay a premium price for an item that is supposed to be a common thing, why would you not try to maximize your profits?

So how long will the amiibo craze last? It can go one of two ways. Nintendo can take the Ty approach: allow the market to determine itself. Ty was on top of the toy market for many years and had highly collectible figures, but when the Beanie Babies crash happened, it happened hard. Now people have hundreds of these mini bean bags stored away in a closet, because Ty never really gave an incentive for the market to continue, and people got tired of Beanie Babies as a whole.

The second option would rely on Nintendo: ramp up production. I don’t think anyone expected amiibo to take off like they did in terms of popularity, so in order to kill the economy, Nintendo could simply increase production of the less common characters to combat the high prices and scalping of their figure line. With an over-saturation, the economy would die, and amiibo would serve their initial purpose of being collectible figures to use with your Wii U and New 3DS games.