Slashdot Mirror
Nintendo Cracks Down On European Importers
Thanks to an anonymous reader for pointing to a Gamesindustry.biz article describing Nintendo's attempts to stop European retailers importing Gamecube/GBA games. According to the piece, "..cease and desist orders have been issued to a number of independent retailers by Nintendo this week, demanding that they stop selling imported Nintendo titles and supply details of their suppliers." With handheld titles such as Pokemon Ruby and Sapphire lacking regional lock-outs, and even US/Japanese Gamecube games being playable with the help of Freeloader, Nintendo are clearly worried about imported titles taking away from native European sales, but as Gamesindustry.biz points out, "..the move will prevent [consumers] from playing titles which Nintendo of Europe has failed to release in this territory, such as the highly acclaimed Animal Crossing."
1) Mainstream retailers in Europe aren't going to do a lot of importing because it would damage the deals they get from Nintendo and others when buying high volumes of their games. Therefore, anyone who DOES sell import versions is damaging the market for the mainstream retailers because that means a lot of their customers will have no interest in the game when it's finally officially released.
2) Because Europe is still the "third string" when it comes to video game distribution, some third-party game publishers don't distribute their own games in Europe and let Nintendo or other big companies do it for them. That means that if Nintendo is publishing a game in Europe that, say, Koei published in Japan and NA, Nintendo gets a better profit margin with both the standard royalty and consideration for doing the publishing. If, however, someone imports the Koei NA version (to continue using that example - I don't know how Koei handles their European distribution) it cuts into the eventual profits of the publishing company when it's officially released.
3) Marketing. Interest in new releases is diluted by the fact that people have already played the imports. This is a particular problem in Europe sine more Europeans speak/read English than, for example, than Americans speak/read Japanese. This dilution of interest means that marketing dollars aren't going to help out a game that might not be that good because the word of mouth has already been spread by importers. Note that this reason is the primary factor in DVD region coding because most movies are stagger-released around the world to allow for regionalized marketing, and in extreme cases a movie could be in its first month of theatrical release in India while the DVD has been out for two weeks in the US.
All that being said, I think Nintendo is making a big mistake here. While I understand the goal of making their retailers happy (probably the main reason for the crackdown), they're running the risk of alienating more customers than they already have. Nintendo would do well to work harder on getting their big releases out in both NA and Europe at the same time. After all, nothing they do is going to make the grey market disappear. They'll just force the most visible importers to work more quietly or quit while others come in and take their place.