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.
Boy Nintendo sure is causing a great deal of distress to GI lately.
Skipping their E3 conference and making them report on games and not onstage antics and now this.
Now they are making Gamestop price their used hardware more competitively, what a crime. Gamestop is already making a killing on their used hardware sales. So they have to drop their price 10 bucks. So what?
I don't blame Nintendo for fighting the used market. GameStop needs some competition especially when they sell a used 3DS for only $10 cheaper than a brand new one.
Sounds to me that Gamestop needs to get their act together not Nintendo,Judging from this article were all better off going to bestbuy.
Nintendo is not undercutting retailers on new products, nor used products. I fail to see the problem here.
All I'm reading is that GameStop is selling them overpriced, especially when Best Buy is even lower. Shouldn't Nintendo be allowed to guide the price for their own product?
YET ANOTHER GameInformer article about Nintendo loaded with negative leanings.
"Whether Nintendo is purposely trying to disrupt its relationship with GameStop is unclear."
I know GameStop totally owns your butts, but you could bother to be realistic about it--GameStop MAKES MONEY OFF THE HARD WORK OF OTHER PEOPLE. It's that simple. If Nintendo (or Sony or Microsoft) wants to sell refurbished consoles, who really cares? Why is that bad? It's an OPTION.
GameStop has made it their business to pay their employees nothing while having comparatively little overhead since they pay only about a third (or far less) for games than they charge for them, and having seen first-hand how it works, they make countless dollars on the same game over and over again, while at best, any game developer or publisher works their ass off developing a game and they only make money on the sale of a game once each--if at all given piracy and the rate at which GameStops fill with used versions of perfectly new games.
Nintendo obviously still relies on brick and mortar, but I can't help but wonder that if this was an article about Sony or Microsoft doing it, GameInformer would be praising their "new decision to offer consumers another choice" rather than miring the whole thing "well, grumble, Nintendo is trying to stab our overlords in the back."
Nintendo is only undercutting the retailers who have an extremely overpriced product. Best buy is $10 less then nintendo on both fronts. Hence, the retailer with the most expensive showing needs to realign their price structure, that is all.
Here i thought BestBuys and Gamestops were closing because it is cheaper to windowshop in store and buy on my smart phone than actually pick up the item i want and walk to the one cashier open. Amazing to find out it was Nintendo's fault the whole time!
So your also saying the company that makes the GameBoy wants to make money off them the 1st time and 2nd time around?! No fair!
Just in time for Shin Megami Tensi IV!! Thanks for letting me know where to shop GameStop.
(Disclaimer I miss FUNCOLAND)!!!!!!!!
SHOCKINGLY, the GameStop subsidiary is up in arms when someone finally calls them on BS pricing structures.
Good on Nintendo. I don't want to support GameStop, and this has given me that option.
Oh no someone is selling a USED system for a decent price,let's all say there undercutting GameStop who sells them for $10 less than a new one.
Bunch of brain dead idiots.
Why would you make a statement saying it is unclear if they are trying to disrupt sales? Why not wait on posting this article until there has been attempts to contact Nintendo on this issue. If attempts to contact go unanswered or ignored then state that in the article. To me it looks like GS is doing some bus driving here.
You call this an article?