The fact here is, the toy company culture no longer works in this age of the internet.
Remember that Nintendo has failed to properly follow trends before in the game industry. You can take a look at Nintendo's mid-to-late 90s gaming console history for the proof. When Nintendo released the Nintendo 64, they overlooked at one thing, which was the storage format. Whilst they outsmarted out Sega with their development libraries, their storage format cost them dearly after Sony entered the market with both good development libraries and using CDs as a storage medium with the Playstation. Nintendo's attempt at VR/steroscopic 3D in the 80s and the 90s also failed badly due to severe health issues associated with them. They later chose CDs as their storage medium after realizing their mistake.
Their online services of their consoles also was known for being pretty shitty. You can look at the Nintendo DSi's online services for that. Their Nintendo Switch Online service was known for being pretty shit-tier at the time of its launch, as compared to competing consoles' online services. The only advantage was that you paid far less for it.
Another thing that Nintendo doesn't realize when being over-aggressive over fan works is that the west spend more time in internet for much more longer than Japan. They just assume that the west also spends the same amount of time on the internet like Japan. Hell, their lawyers assume that western copyright law is like Japan's one! Nintendo doesn't even look at the fact that the internet works very differently.
They basically think that the fan works will kill their profits. They don't take the option of monetizing out the fan works. It's hurting their reputation. Sega at least tried to keep whatever good reputation they had left by letting fans port their Sega Genesis Sonic titles.
Stuff sold that were made with physical material is bound to run out of stock at some point. Toys fall on the physical works side. Purely digital works, however, cannot run out of stock because there's no physical material involved.
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China isn't forcing them, rather the platform is ran by the members of CCP.
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The fact here is, the toy company culture no longer works in this age of the internet. Remember that Nintendo has failed to properly follow trends before in the game industry. You can take a look at Nintendo's mid-to-late 90s gaming console history for the proof. When Nintendo released the Nintendo 64, they overlooked at one thing, which was the storage format. Whilst they outsmarted out Sega with their development libraries, their storage format cost them dearly after Sony entered the market with both good development libraries and using CDs as a storage medium with the Playstation. Nintendo's attempt at VR/steroscopic 3D in the 80s and the 90s also failed badly due to severe health issues associated with them. They later chose CDs as their storage medium after realizing their mistake. Their online services of their consoles also was known for being pretty shitty. You can look at the Nintendo DSi's online services for that. Their Nintendo Switch Online service was known for being pretty shit-tier at the time of its launch, as compared to competing consoles' online services. The only advantage was that you paid far less for it. Another thing that Nintendo doesn't realize when being over-aggressive over fan works is that the west spend more time in internet for much more longer than Japan. They just assume that the west also spends the same amount of time on the internet like Japan. Hell, their lawyers assume that western copyright law is like Japan's one! Nintendo doesn't even look at the fact that the internet works very differently. They basically think that the fan works will kill their profits. They don't take the option of monetizing out the fan works. It's hurting their reputation. Sega at least tried to keep whatever good reputation they had left by letting fans port their Sega Genesis Sonic titles. Stuff sold that were made with physical material is bound to run out of stock at some point. Toys fall on the physical works side. Purely digital works, however, cannot run out of stock because there's no physical material involved.