Nintendo Pulls Out Of Brazil, Blames High Taxes
Nintendo has decided to stop selling its hardware products in Brazil, announcing that it will no longer distribute its games and consoles there. The decision is the result of high tariffs on electronics, which the company said created a business environment that made continued distribution in Brazil an "unsustainable" task.
"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," Nintendo said in a statement. "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."
The decision isn't a total surprise. Though Gaming do Brasil has been distributing Nintendo products in Brazil for the past four years, Nintendo of America president Reggie Fils-Aime warned in November 2013 when launching the Wii U over there that the country's import policies posed challenges, which still exist today.
"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," Nintendo added. "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."
Game consoles have a high markup in Brazil. At current prices, Sony's PlayStation 4 system sells for 3,999 Brazilian Reals, or nearly $1,500 in U.S. currency. Microsoft's Xbox One is a bit cheaper at 2,199 Brazilian Reals (~US$800). Though the Xbox One is less expensive (Microsoft has a manufacturing plant in the heart of the Amazon forest in the city of Manaus), both are comparatively expensive to other parts of the world due to Brazil's inflated import fees and taxes.
"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," Nintendo said in a statement. "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."
The decision isn't a total surprise. Though Gaming do Brasil has been distributing Nintendo products in Brazil for the past four years, Nintendo of America president Reggie Fils-Aime warned in November 2013 when launching the Wii U over there that the country's import policies posed challenges, which still exist today.
"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," Nintendo added. "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."
Game consoles have a high markup in Brazil. At current prices, Sony's PlayStation 4 system sells for 3,999 Brazilian Reals, or nearly $1,500 in U.S. currency. Microsoft's Xbox One is a bit cheaper at 2,199 Brazilian Reals (~US$800). Though the Xbox One is less expensive (Microsoft has a manufacturing plant in the heart of the Amazon forest in the city of Manaus), both are comparatively expensive to other parts of the world due to Brazil's inflated import fees and taxes.
