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Nintendo talks software lifespan, retail spacing and how digital can help all
Recently, except for certain software, the lifespans of software in general are increasingly becoming shorter. Even a small excess of inventory can cause a price break of the software at the outlets just shortly after the launch, and retailers are taking a rather cautious attitude in making purchase orders. This situation is simultaneously causing frequent losses of sales opportunity for the software titles that have sold more than the retailers’ original modest expectations.
By asking our retailers to take part in selling our digital products as we propose, they can prevent the losses due to having excess inventory and prevent their business opportunities from being lost due to being out of stock, we believe.
In addition, if they make use of a technology called POSA (Point Of Sales Activation), where they can have a software exchange code without any inventory value and their purchase is realized when a consumer buys the software and activates the software exchange code through a POS register, they do not have to stock the inventory until the actual sale occurs, which further increases the advantages of this distribution system. Even to those retailers who have not been able to deal with our products due to the inventory risk issue until now, Nintendo might approach them with this sort of transaction option and we might be able to further expand the exposure of our digital download software to consumers as the result.
So far, the software sold at the Nintendo eShop has not been offered in other sales channels, so the price points for the consumers are virtually fixed. When it comes to the digital download software that our retailers are going to deal with, just as they do so for our packaged software, we will ask them to decide the price points. Accordingly, the retail prices for the same digital download product can vary by retailer. In terms of the fact that the company is offering the value of the software itself, we do not have an idea to act on such a belief as, “digital download software should be sold at a cheaper price point than the packaged software counterpart.” In terms of the Japanese “maker’s suggested retail price,” in principle we intend to set the same maker’s suggested retail price point for a software title. By taking this approach, there will not be a situation like “there is no markdown for the digital products while markdowns are the norm for the packaged software.” We would like each of our consumers to choose the most appropriate purchase option for them.
Link
By asking our retailers to take part in selling our digital products as we propose, they can prevent the losses due to having excess inventory and prevent their business opportunities from being lost due to being out of stock, we believe.
In addition, if they make use of a technology called POSA (Point Of Sales Activation), where they can have a software exchange code without any inventory value and their purchase is realized when a consumer buys the software and activates the software exchange code through a POS register, they do not have to stock the inventory until the actual sale occurs, which further increases the advantages of this distribution system. Even to those retailers who have not been able to deal with our products due to the inventory risk issue until now, Nintendo might approach them with this sort of transaction option and we might be able to further expand the exposure of our digital download software to consumers as the result.
So far, the software sold at the Nintendo eShop has not been offered in other sales channels, so the price points for the consumers are virtually fixed. When it comes to the digital download software that our retailers are going to deal with, just as they do so for our packaged software, we will ask them to decide the price points. Accordingly, the retail prices for the same digital download product can vary by retailer. In terms of the fact that the company is offering the value of the software itself, we do not have an idea to act on such a belief as, “digital download software should be sold at a cheaper price point than the packaged software counterpart.” In terms of the Japanese “maker’s suggested retail price,” in principle we intend to set the same maker’s suggested retail price point for a software title. By taking this approach, there will not be a situation like “there is no markdown for the digital products while markdowns are the norm for the packaged software.” We would like each of our consumers to choose the most appropriate purchase option for them.
Link