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Nintendo Puts Business In Brazil On Hiatus
jones_supa writes: Nintendo has announced that it will end distribution of its consoles and games in Brazil. In a statement, Nintendo attributed the move to high import duties, which makes doing feasible business difficult. The company could avoid those duties with a local manufacturing operation, but has chosen not to establish one, presumably for the costs involved. In a statement e-mailed to Polygon, Nintendo of America said that the company's distributor for Latin America would no longer send products to Brazil, but it would continue to distribute Nintendo goods to other parts of South America. Nintendo will also keep monitoring the evolution of the business environment in Brazil and evaluate how to best serve Brazilian customers in the future.
There are no local industry to be protected. Brazil has almost no electronic industry, and absolutely no computer/videogame/high-tec industry.
The whole protection excuse is meant only to justify absurd taxes, that goes directly to the pockets of politicians. While most import taxes in EUA are about 3%, the default rate for imports in Brazil are about 80%.
And it doesn't get better if you put a local subsidiary, you still have an absurd amount of local taxes. Except if you're a friend of the government, you have no way to be competitive in the internacional market.
I was thinking of a similar experiment -- if a company refuses to sell a product in your country, then it loses all copyright / trademark / patent protection. Locals would then be free to open up shop and start making the hardware or copying the software. I'm not sure if this would work, but I'd be interested in seeing the result nonetheless.
Wouldn't it be easier to go Uruguay or Venezuela?
I've lived in Venezuela. It is not a poor country. The people are poor, but they have huge oil reserves, diamonds, gold and many other natural resources. They used to be the largest oil exporter to the US until Hugo Chavez started diverting that oil to Cuba for free. Venezuela also charges import duties on all products (with some exception in the state of Nueva Esparta, which is mostly duty free). They also charge an income tax that most people do their best to avoid ever paying.
The real problem with Venezuela is corruption. When I lived there, I did not keep an ID on me at all times, even though it was required by law. I kept my passport in a safety deposit box because it was cheaper to pay the fines for not having proper ID than it was to pay the bribes to get my passport back from the National Guard when they would do one of their regular shakedowns. If you were a mere janitor for the state-run oil company (PDVSA), you were probably set for life. If you didn't have some important friends or family, you probably couldn't get a job for PDVSA.
Agreed it's moronic. But this is Nintendo we're talking about. Region locking isn't about the money; it's about a combination of their messed-up corporate structure (the various international companies are only loosely integrated) and nasty control-freakery. They have a long history of liking to say "title X does not fit with our irrationally conceived stereotype of region Y, so we won't release it there, or will cut it to hell first". Region locking is one of the tools they use for that.
The whole "region locking for differential pricing" thing at least had a simple motive behind it ("more money"), but it doesn't work all that well (markets where you need to sell cheap tend to have too much piracy to be worth it anyway). Most people who region lock for that reason are moving away from it now (Sony and MS have ditched it entirely).