Nintendo's Refurbished DS, 3DS Sales Risky Move
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.