The lights are on
Nintendo has recently started selling refurbished DSi XL and 3DS units on its website. This might seem like an insignificant change, but the pricing scheme in place disrupts a cardinal rule of direct to consumer sales.
In the days before the Internet, there were hard and fast understandings between manufacturers and retailers. Chief among them was, "do not undercut retailers." Mail order was no substitute for shelf space, because it was the primary way to get products in front of consumers. It was acceptable to sell directly to consumers, but the prices had to remain equal or higher in order to preserve relationships.
Things have changed. Manufacturers are able to communicate directly with customers, and many have their own online stores. People have become more accustomed to waiting a few days for goods, and immediacy is no longer a key selling feature. Still, the old arrangements are in place. It's rare to see retailers pushed around on pricing by direct competition from the supplier.
As of writing, Nintendo is charging $99.99 for a standalone refurbished DSi XL costs and $129.99 for a refurbished 3DS (each with a one year warranty). Best Buy, who also sells used units is currently priced at $10 less on both fronts. GameStop (Disclosure: Game Informer is owned by GameStop) is currently asking $109.99 for used DSi units and $159.99 for used 3DS consoles (with similar refurbishing).
Whether Nintendo is purposely trying to disrupt its relationship with GameStop is unclear. However, it would not be the first time the manufacturer was at odds with a retailer. Kotaku has previously followed the strange tale of Nintendo's relationship with Amazon, which has deteriorated to the point where the online retailer does not sell Wii U and other hardware. Burning a bridge with other retailers when sales are down is counterproductive to Nintendo's recovery.
Retail is still important for getting in front of the more casual consumer. Sony stated earlier this year that it still anticipates relying on brick and mortar. Whether Microsoft will lean as heavily on traditional retail, or lock out used games, is unknown but we expect to have more information on May 21 when the next Xbox is revealed.
[Source: Nintendo via Joystiq]
Email the author Mike Futter, or follow on Google+, Twitter, and Game Informer.
Gotta love all the comments trying so hard to see brand favoritism where there clearly is none.
This is an interesting move. I know that I wouldn't buy refurbished hardware from them since I like purchasing hardware new, but this is good for people who want a DSi XL, 3DS, or 3DS XL for less and don't mind getting one used. It's going to be interesting how this affects retailers, like GameStop, who sale refurbished Nintendo hardware.
This post seems like a giant overreaction.
Gamestop has been undercutting everybody's games for years now. It's not so good when it happens to you, does it?
I don't care much for Gamestop's "Bowl out the competition so we can set prices as high as we want" code of ethics. So in my opinion they deserve to be knocked down a peg or two. I support Nintendo's decision.
Gamestop is horrible when it comes to selling used hardware.
This article sounds like it was written at the request of the president of Gamestop.
Gamestop doesn't give enough discount for used items compared to their new stuff. I don't care in the least that nintendo is under cutting them.
all this article is saying is GS needs to lower they're prices!
What kind of negative spin is this? Every other gaming site praised the fact that you can get a Nintendo refurbished system with a 1 year warranty. This is in no way an attack on GameStop. Please stop with the Negative spin.
This was indeed news worthy for us readers and gamers, Mike. I appreciated hearing this as I have been wanting a 3DS. I want to receive a quality device and also support Nintendo. I was glad to see the different prices listed including Gamestop's, the parent co. disclaimer, and the various links to relevant articles and sources. I am going to buy from Nintendo now which is not what GS would have me do but it just sounds better. This action by N is a "clear" assault on second hand retailers albeit with the intention to ultimately serve customers and of course make money (back.) N is making some strange moves lately which has lead to some interesting articles.