Nintendo has revealed to its shareholders and the public what it views as a bold and daring foray into the digital games market, at long last making a big push to take a slice of the digital pie away from its competitors. But, in true Nintendo fashion, the games giant isn’t content to simply copy the tried-and-true distribution model of others, adopting instead a plan that offers more choices to the consumer and seemingly hands over the reins to retail merchants. But is this move what it seems on the surface? Does Nintendo deserve applause for taking the road less traveled, or are they simply re-inventing the wheel?
BNBGAMING’s venerable Editor-in-Chief Martin “Maximum Wattage” Watts, Japanese Affairs Correspondent Isaac “Please Don’t Hurt ‘Em” Hammer, Communications Manager Dan “The Man” Mahdavi, Sony Correspondent Mat “Just One Tee” Chappell, and Microsoft Correspondent Meg “Meggerdoo” Smith dig out the hatchet and discuss.
* * * *
Nintendo is planning to fully enter the digital realm and, boy, it is making one heck of a grand entrance. No doubt pushed by its recent financial woes, what the new download strategy will offer consumers isn’t in itself revolutionary, but the way in which it is going about it could cause quite a stir. Offering same-day releases across both physical and digital is intriguing, not so much because it offers choice to consumers, but because it could increase competition quite nicely.
But the area of real interest is how Nintendo will bridge the two in a bid to get more customers online, while also appealing to long-time retail partners. On day one of a new software release, downloadable codes will also be available to sell in retail stores. This is apparently designed to bring down inventory and risk costs associated with physical retail, while also reducing lost sales when retailers don’t have sufficient stock. Even the most expert buyers can underestimate the commercial success of a title; I mean how many titles have had a sudden, unexpected burst of sales?
My own opinion is a bit more cynical. It seems to me that Nintendo is more interested in using retailers to help spread knowledge of their online business than act as the brick-and-mortar saviour it is sort of making itself out to be. Sure, it wants more people to buy its games, but having people buy their games direct from them without any of the associated costs? It’s pure business genius – if Nintendo can get digital sales up to a high percentage of total sales on a consistent basis, it can drive down costs while also making more revenue. It’s clear that Nintendo understands how core and casual consumers now shop for their games, and I could see this being potentially very successful. Let’s just hope it doesn’t anger retailers – it still needs them to shift the actual systems.
I’m going to chime in on just why this works for Nintendo, especially in Japan.
Here, credit cards are not something that absolutely everyone has. They aren’t an important, integral part of everyday life. By offering another avenue of distribution beyond prepaid cards that often leave a few yen behind and instead being able to buy the one game exactly creates an entirely new market.
This is an amazingly innovative step for Japan, though with the prevalence of credit cards, I’ll wait to see how it pans out.
While I can see that Nintendo are doing something they’ve never been a part of before, I don’t see anything innovative about their methods. They’re creating a physical way of purchasing digital content, which is something that’s been going on for a long time. Sure, you can now buy one particular game, but if you’re in the shop buying a game why not just buy the plastic with a disk or cartridge and have a physical copy? Saves on the trouble of downloading it. I really don’t see why this idea is something to be proud of. Nintendo seem to be acting like they’ve invented the digital era, when really they’re just very late for the last train. Sony and Microsoft have been doing digital retail, with a way of buying the currency in physical stores, for 5+ years now, and to me that says that not only are Nintendo behind the times, but they’re joining what is soon to be an outdated model anyway. They’re announcing themselves as an online presence in such a loud way that I feel they’re making a fool of themselves. No doubt they’ll catch their new core market, the family-centric gamers where parents aren’t particularly tech-savvy and kids that are amazed that they can get the latest games through the internet, but this is nothing new to anyone that’s been paying attention for the last long while.
There are plenty of developers, for PC especially, that sell you a disk with a client on it that allows you to download a game, be it from Steam or otherwise, and that means that this is old tech. Nintendo may be making a song and dance about the internet as a medium for gamers, while “supporting retailers” in brick-and-mortar stores, and I imagine it will pay off big-time in a business sense because they are Nintendo, but I’m sitting here wondering why I should care. I think that’s where Nintendo have become detached from their original market. Why would hardcore gamers care now that Nintendo are half a decade behind the game?
Daniel, not to sound direct, but did you read the same article as me? The “buzz” about this is because they’re a) doing day-one physical and digital sales and b) providing digital codes but allowing retailers to decide the price. It’s by no means revolutionary but it is different from what is currently being done.
I did, and I don’t think there’s much that’s in any way new about that. Retailers do decide prices. All Nintendo are doing is reducing the overheads required so retailers have more flexibility in deciding. Games did that when the move was made to the CD era. It isn’t new. And digital games are already reducing in price for the PC as a result of indie developers pumping out massive titles like Bastion. Nintendo are just taking what’s already done and slapping a new label on it.
This sums it up:
“Of course, for all the digital download software, we ultimately need our consumers to download them to their Nintendo 3DS system through the Nintendo eShop. However, when it comes to how our consumers choose the candidates and make the final purchase decision, as well as how they pay for the software, we are going to enable consumers to go through these processes at both retailers and the Nintendo eShop.
Consumers will be able to buy digital Nintendo games direct through hardware, or obtain 16-digit download codes from retailers. And it’s not just so that consumers have a choice. It’s because many don’t have a choice.”
This has been going on for a very long time, and is almost identical to buying credit and using it for games. Day one digital releases already happen on platforms like Steam. Their method is very old news.
I think Nintendo have been pretty smart here, in all fairness.
Day-and-date digital distribution sounds like an outdated model in as much as that downloadable vouchers have been in stores for a while on PlayStation 3 and Xbox 360, but as far as the console manufacturers are concerned, I think Nintendo are actually leading the market here. As things stand, day-and-date digital and retail releases are rather haphazard on PS3 and 360. They only occasionally exist at all, arrive with little fanfare or marketing when they do and are often hideously priced. In terms of actually delivering a digital model alongside the existing retail system, Nintendo are far from late to the party as far as the current console holders are concerned.
Keeping a retail presence for digital codes is far more about Nintendo’s own interests than it is about saving physical retail, in my opinion. Like Martin says, it’s just sound business sense. It’s a model which provides flexibility and works for everybody concerned, including consumers, for whom the option to trade games towards digital codes and benefit from retailer deals and sales remains. In providing a digital option, Nintendo are increasing their online presence while keeping brick and mortar stores in the loop and maintaining the option of choice for the end consumer. As we all shift further to an all digital future, any strategy which keeps so many doors open is welcome to me, although I’ll personally continue to buy physical until the option to do so no longer becomes available.
I get that this announcement is exciting; heck it’s new, and it’s expanding Nintendo’s digital business! But I don’t really understand how this is supposed to reinvigorate Nintendo.
I get that this is a reinvention based on the rise in digital sales but is this what is really important?
Forget day-one physical and digital sales and the prices of digital codes being decided by retailers; shouldn’t they be depending less on re-releasing the classics and milking the metaphorical cow? I don’t understand why this is their primary focus when they are obviously falling behind in the most important area… new, exclusive releases.
For example, the Wii was such a great offering; then slowly but surely, the platform started falling back on Nintendo classics like The Legend of Zelda series and Super Mario games; though they are fantastic franchises, it’s nothing new. I also distinctly remember the 3DS dropping in popularity and price shortly after launch because no one wanted the console. Why? Because most of the exclusive games had been released already.
I don’t really understand this buzz. Regardless of the way you purchase your games, the games themselves are what’s important and right now, Nintendo are depending on oldie-goldie sure-fire hits. They are lagging behind not because of the lack of digital sales but because, while other companies insist on offering something new, Nintendo are busy offering nothing but the same.
Maybe I’m missing the point here, but I have a hard time believing that this will turn the tide.
Again, I want to reiterate that for Nintendo’s primary domestic market, Japan, this is an innovative and smart way to tap an existing customer base. The prevalence of the DS line can not be overstated, with a huge amount being in the hands of the “under 15” demographic. For them, buying the long-existing prepaid cards in convenience stores could well have been impossible, either due to local regulations or pricing.
By moving to take advantage of existing relationships between brick-and-mortar stores and customers, I predict a sharp jump in sales. Basically, this is also a no-lose proposition for Nintendo, as it engenders goodwill with business relations and the market, at no real additional cost or risk.
* * * *
Share Your Thoughts: We’ve shared our thoughts and now it’s your turn. What do you think about Nintendo’s plan to offer Day 1 downloads as well as involve retail outlets with games’ pricing structure? Is the Big N making the right move?