Nintendo Pulls Out of the Brazilian Market
Back in October, we covered complaints over the price of the PlayStation Four and Xbox One in Brazil. As a result of the country’s high import duties and taxes, the PS4, which is priced at $400 in America, costs the equivalent of $1,800 USD in Brazil while the Xbox One jumped in price from $500 to $1,000.
Sony and Microsoft are continuing in the Brazilian market despite very nearly being priced out of it because of the local taxes. On the other hand, Nintendo has decided that the prices caused by high taxes are too much so they are pulling their products from Brazil.
This weekend, Nintendo’s Director and General Manager for Nintendo of Latin America, Bill van Zyll, announced Nintendo’s withdrawal from Brazil by saying that “challenges in the business local environment have made our current distribution model unsustainable in the country.”
Using the information that Sony gave us about the PS4’s pricing back in October, 63% of the price of a console was attributed to various taxes, or about R$2,500 (Brazilian Real) of the R$4,000 retail price which itself is after taking a R$250 hit to Sony to get the retail price down.
While I couldn’t find a local price for a Wii U or 3DS console in Brazil, MarketWatch reported that the US dollar equivalent to a copy of Super Smash Bros. for Wii U was $74. The same game retails for $60 in America which makes for a near 25% markup. Based on Sony’s example, the markup on hardware is much more. Even if Nintendo doesn’t absorb a loss themselves, the high prices would make it hard for gamers to afford their consoles.
Nintendo isn’t even the first major electronics company to pull out of the market. Back in 2012, HTC did the same because of taxes and duties. The year prior, Apple opened up a local factory to get around the taxes.
For their part, Nintendo’s Latin America distributor, Juegos de Video LatinAmerica, isn’t willing to give up on Ninty in Brazil. CEO Bernard Josephs told UOL, “We will continue to monitor the environment in the country so that we can evaluate future opportunities.”