Retail involvement key to 3DS, Wii U digital strategy

Nintendo will take an unconventional approach to selling packaged 3DS and Wii U software as downloadable games -- one that will rely on retailers to help expand its digital business. Though Nintendo has lagged behind its competitors when it comes to offering downloadable versions of packaged games on its systems, it revealed a retail strategy that could help the company catch up, and hasten the adoption of downloadadable games for consumers. Starting with New Super Mario Bros. 2's release this August, consumers will be able to purchase digital versions of packaged 3DS games either through the system's built-in eShop service or at retail outlets/websites (consumers receive a code that they can redeem in their 3DS for the downloadable game). "It seems that, in general, digital distribution of the software available today is mainly aiming at no involvement from retailers," said the company's CEO Satoru Iwata. "Nintendo has decided to choose an approach in which we will ask our retailers to be proactively involved." Retailers will be able to set the price of the codes as they see fit. They will also be able to provide a more direct option (as opposed to buying a Nintendo Points card) for consumers who want to buy a downloadable game but don't have a credit card or don't want to use one for privacy/security purposes. The publisher notes that there are several advantages with this arrangement, such as limiting losses from excess inventory, retailers being able to sell games even if they run out of physical stock, and retailers shouldering billing and settlement costs instead of Nintendo. "Furthermore, we recognize that one of the biggest hurdles for the expansion of our digital business is the limited methods to expose digitally downloadable products to potential consumers," said Iwata. "This recognition is one of the reasons why we are taking this sort of approach." Though the percentage of 3DS systems connecting online and accessing the eShop at are an all-time high for Nintendo handhelds (70 percent in the U.S. and Japan), the company says retailers will need to play an important role in letting consumers know they can download packaged 3DS games. "If only the consumers who proactively visit the Nintendo eShop are aware of the digital download software that we deploy, there is no chance that our digital business can drastically expand," the executive noted. "Asking our retailers to be proactively involved not only increases consumers' exposure to our digital download products but also will make sense in other ways." Nintendo expects to pursue the same strategy with its packaged and downloadable software for Wii U when the home console launches during the holiday season this year. It has already begun experimenting with selling downloadable games through retailers by offering codes for 3D Classics: Kid Icarus at GameStop.