Nintendo has announced that it is departing the Brazilian market. The company cites the local business environment as the motivating factor of the pull-out.
The publisher will cease distribution of hardware and software in the country this month. High tariffs have put pricing pressure on imports to the territory, and Nintendo has opted not to invest in local manufacturing operations, which would circumvent the import fees.
“In response to ongoing developments in the Brazilian market, Nintendo of America Inc. today announced changes to the physical distribution of its products in that country," a company representative told us via email. "Starting in January 2015, Gaming do Brasil, a wholly-owned subsidiary of Juegos de Video Latinoamérica, GmbH, will no longer distribute Nintendo products in Brazil. Gaming do Brasil has distributed Nintendo products in the country for the past four years. Despite the changes in Brazil, Juegos de Video Latinoamérica will continue to be Nintendo’s distributor for Latin America and they remain committed to the brand and the region."
According to UOL Jogos, a Brazilian outlet, there have been distribution problems in the country impacting physical and digital purchases. Problems with eShop sales stem from Nintendo’s decision not to comply local banking regulations that prevent the use of certain bank cards on storefronts that advertise in local currency but actually charge in US dollars. There is still hope that Nintendo may distribute again in Brazil, but there would likely need to be changes to the import policies in that country.
“Brazil is an important market for Nintendo and home to many passionate fans, but unfortunately, challenges in the local business environment have made our current distribution model in the country unsustainable," the representative told us. "These challenges include high import duties that apply to our sector and our decision not to have a local manufacturing operation. We will continue to monitor the evolution of the business environment and evaluate how best to serve our Brazilian fans in the future.”
Update: Nintendo isn't the only company to run into problems in the Brazilian market. In 2013, PlayStation 4 fans reported exorbitant prices for the new console in that country. Costs equated to approximately $1,850 USD. The Xbox One was weighing in at the equivalent of $1,000 USD.
[Source: UOL Jogos via NeoGAF]
Our Take
This is certainly an unfortunate turn of events for both Nintendo and fans in Brazil. Unfortunately, financial realities as they pertain to local business regulations can have drastic impacts on the decision to operate in a given market. In this case, it means that Brazilian fans will need to obtain their Nintendo products as imports from Japan, the United States, or other Latin American countries.