Is Nintendo Missing Out On Developing Markets?

Illustration for article titled Is Nintendo Missing Out On Developing Markets?

In an investor Q&A published on Nintendo's website, president Satoru Iwata explains why Nintendo does not officially release games or systems in developing nations (think Latin America, India, South-East Asia, Africa, etc). And he seems to be missing something.


"It is true that not only those in Japan and the other developed countries in North America and Europe but also those in several countries with rapid economic development can afford more entertainment than before", he says. "And it is vital for our basic strategy of 'gaming population expansion' that more people in such countries as well as in Japan, North America and Europe, enjoy our video games and feel convinced to pay for them."

"Meanwhile, some in newly-emerging countries do not have an established custom of paying for software", Iwata continues. "We do wonder if the traditional business model of the video game industry will succeed in such regions. If we do totally different business there with cheaper services and software than developed countries, people in developed countries would have negative feelings toward us and say, 'why do we have to pay much more than those playing video games elsewhere?' This could be one of the biggest problems for us that would need to be solved. Needless to say, popularizing our video games throughout newly-emerging countries is indispensable for Nintendo's growth in the mid-and-long term. We will take enough time to work on it."

It sounds like Nintendo is struggling to find ways to make money off the DS and Wii in these developing markets. But why does Nintendo need to sell a DS or a Wii, when the company has a rich back catalogue of both systems and games?

In Latin America, Sega has licensed the Mega Drive to Tectoy, who sell the old console in a new box at a cheap price. Again, in Latin America, Sony has only just officially released the PlayStation...2.

These consoles may be old news to you, but they're not being sold to you. They're being sold to people who may have never owned a games console before, or may not even have really sat down with a video game before. They're not - for the most part (hardcore importers and long-time fans aside) - people accustomed to hardware generation shifts, or nuances with the RPG genre, or give a crap about who the developers of the latest Modern Warfare game are.


They're new. And Nintendo should be taking advantage of that! Repackage the Nintendo 64, or even the GameCube. Give them new cases, new names, and sell them cheap. Gamers in the West won't complain about the price, because they're old games, and gamers in these developing markets won't complain because they're getting cheap video games. And who cares if we think they're old? If they're new to someone else, they're new.




These areas have really high piracy, and Nintendo is (rightfully) skeptical that they'll make much money in markets where corruption is so high that there's little hope of them making lots of legitimate sales.

In the long term though, establishing a presence in these countries would probably be beneficial to them. Once the infrastructure matures more, they might be able to get away with things like online authentication and other anti-piracy measures that currently aren't feasible.

Think of it as a loss leader, establishing the brand name.