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Why Nintendo Leaving Brazil is a Lose-Lose Situation

In January, Nintendo of America announced that it’s  officially pulling out of Brazil due to “challenges in the local business environment.” Brazil’s loss of Nintendo isn’t only hurting them though, Nintendo is a big loser in its their withdrawal too.

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The “challenges” Nintendo is referring to aren’t anything new for video game markets due to the high tarrifs and taxes that apply to  products, but anyone from Brazil could tell you that much. Sony’s PlayStation 4 for example which costs roughly $400 in the U.S. costs $1500 in Brazil. Nintendo’s systems don’t fare any better with the Wii U costing $700 in Brazil while at a local U.S. Walmart it’s priced at $250.

So it’s easy to see why Nintendo left; it’s not easy to pitch a system at 300 percent the normal price thanks to Brazil’s laws, but even then, if you look at the numbers you get the feeling that Nintendo might have screwed up here.

Not only did Nintendo leave a country that has seen a recent surge in mobile gaming technology, it also left the largest Latin American gaming market, and the 5th largest gaming market in the world. Even worse is the fact that mobile gaming sites like Tresensa predict Brazil to be one of the leading markets for mobile gaming by the end of 2016, and that the largest segment of gamers are using mobile devices; a market that Nintendo could dominate with their Nintendo DS, the best selling mobile gaming device ever made.

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But like the title says, this is a lose-lose. Brazil lost here too. While the country-wide economic loss involved with losing a major multi-billion dollar company is apparent, the people suffer too. In an environment where systems can cost more than a thousand dollars, the loss of the comparatively cheap Nintendo systems means no games at all for some people, and general disappointment with the newfound difficulty of finding Nintendo systems for those who can afford them.

affording them is the problem though. Research cited by Kotaku Brazil in 2013 found that the Xbox 360, a ten-year old console, was by far the most popular console there.  Not only is the console ten years old, but it’s also made by Microsoft, the only major gaming company to set up an in-country factory to avoid those deadly tariffs, making the Xbox 360 one of the most competitively priced systems in Brazil, something that has to appeal to Brazil’s large poor population.

So what if the Xbox 360 is ten years old? It’s the cheapest console available so everyone should have it right? Well, not exactly, remember that Nintendo DS I mentioned earlier? Nintendo, in general, makes cheaper systems than their competition, and on top of that handheld systems like the Nintendo DS are a third or fourth the price of major consoles.4004827749_e78ef49aec_z

Brazil is home to a booming games market, has a general public who are into gaming on the go, and value a ten-year old console to any of the new ones arguably because of its conservative price and online features. The Nintendo DS is a pocket sized gaming device, a third the price of major home consoles like the Xbox, and is getting improved online gameplay every year in addition to new games, something that the Xbox 360 is losing quickly.

All I’m saying is the Nintendo DS sounds like the perfect console for the quickly developing mobile gaming market that Brazil is cultivating. Would it sell better than the Xbox360 with some more time and advertising? Who knows, but I can say that Nintendo leaving Brazil didn’t only hurt Nintendo’s sales, but Brazil’s gaming community along with it, something that I never like to see happen to anywhere in the world.