Pretty much. They didn't expect the demand to be as high as it was. It was just supposed to be a neat little side product.
They want the VC to be THE place to buy their retro games.
It will actually be a better deal on the Switch because you will have wireless controllers and the ability to play moble. Would be nice if they Cross honored older VC purchases, and made them account locked and not system locked.
It's funny that they created demand for a competing product through their policies, but, instead of doing the simplest thing and altering those policies, released that competing product, themselves. The demand for these mini boxes is likely influenced by frustration or distrust over how long digital purchases will be honored before people are forced to buy games over again. These mini boxes, on the other hand, are things that you can own indefinitely. You buy one and you never have to worry about not being able to play the games on it, even decades from now, rather like the reason for buying a movie on Blu-ray, instead of the digital copy. I think that that's partly why you see so much interest in these, whereas the same package of games for the same price on the Virtual Console wouldn't be anywhere close to as interesting.
They wouldn't have this problem of disinterest in the Virtual Console and of balancing supply and demand if they were to simply pledge, like Steam or GOG, that any games that you buy will always be in your account. That, of course, would be risky. Just imagine how much money they've made over the decades from gamers re-buying games, especially classics like the Super Mario Bros series on numerous consoles and portables. Nintendo probably sees having to re-buy Virtual Console games for newer consoles as no different than re-buying them on cartridges for newer systems in the past, though it's quite a bit different in the minds of gamers. Gamers will mostly gladly re-buy games on physical media that, because of the principle of the thing, they'd hate to have to re-buy digitally, and Nintendo is tapping into that by releasing hardware like this. If they're smart (and slimey), they'll eventually release a newer NES Mini and a newer SNES Classic that have many of the same games (the classics, like SMB and Zelda, that first-time buyers would expect), but enough new games so that owners of the first versions will still buy them (and, thus, pay again for the same games).
