The Retail Cold War: An Investigation Into The Strangest Street Break In Australian History

According to all official statements from Nintendo, Ocarina of Time on the 3DS is on sale today – but most of us have been playing the game since last Friday. It was the strangest, most covert street break in Australian history – a street break that threatens to transform the way games are sold in this country. We spoke to all the major retailers, and Nintendo itself, to try and uncover precisely what happened, and why.

“The launch date remains the 30th of June,” claimed the statement, read out word for word by a Nintendo representative – the wording careful, precise.

“Nintendo believes it is incorrect to single out any particular retailer. If any retailers sell the game prior to the 30th of June that is a matter for Nintendo to take up with those particular retailers.”

We scribbled it down quickly before being asked to read back what we had written, to make sure we had it exactly right. Nintendo is known for being extremely careful with its brand — cold, emotionless statements like this were the end result of that almost puritanical zeal.

Zelda: The Ocarina of Time was being sold in stores – EB, Game, JB Hi-Fi – there was no doubt about that; we had the receipts as evidence and confirmation from store clerks around the country. But the criteria required to actually purchase a copy of the game read like the entry rules to some strange, exclusive club – like buying prohibition-era booze. You half expected Eliot Ness to bust down the doors in protest.

A pre-order was required. No in-store advertising was allowed. Games had to be kept behind the counter. It wasn’t to be discussed over the phone.

“Are you selling Ocarina of Time today?” we asked one EB clerk.

“The game is available on the 30th,” he replied, cooly.

“But if I walk into the store and ask for it today,” we continued, “will you sell it to me?”

“Quite possibly.”

This was not your normal street break. We weren’t even sure if you could call it a street break at all.

Our story begins at GameTraders.

“The logic behind selling this game early,” claimed Mark Langford, Managing Director of Game Traders, “is that our stores take exception when publishers do exclusive deals with major corporations but they won’t offer the same deal to us, an Australian-owned company.”

It was June 22, eight days before The Ocarina of Time was to be released in Australia. The game was already on sale in Europe and in other territories, but larger retailers such as Game, EB and JB Hi-Fi were under strict instructions not to sell it until June 30. GameTraders, taking advantage of this fact, bought grey-imported stock from distributors overseas, selling European versions of the game in GameTraders stores across the country, over a week before gamers could buy it anywhere else.

“The game was released in the UK a couple of weeks ago, so GameTraders were able to import stock ahead of Australian release date,” said one retail source, who asked to remain anonymous.

It was a unique situation, which challenged many of the norms that Australian retailers are used to dealing with. If a game breaks street date, and other retailers can prove this, the green light is usually given by the publisher to go ahead and sell as normal — it then becomes a free for all and retailers can sell without fear. Since GameTraders, by selling imported stock, were operating outside of these traditional rules — albeit within the boundaries of the law — other retailers were at a complete loss.

“EB, Game, JB all started to lose pre-orders as GameTraders started selling early,” claimed our source. “So Nintendo gave permission to everyone to sell to pre-order customers only – if they asked or were going to cancel – but the game itself was not allowed to be put on the shelf.

“All retailers put Nintendo under pressure to let us sell early, but they refused. Not even EB were brave enough to defy Nintendo’s guidelines.”

The politics of the street break are shrouded in a strange mystery. Publishers are well within their rights to punish retailers for selling games early, but speaking to games industry insiders, such fines rarely manifest themselves. Most people we spoke to claimed that, in their experience, the threat was never followed through. An MD of a high profile specialist retail chain claimed that most “punishments” took the form of “lower priority allocation” or lowered advertising spend in-store, but never a monetary fine.

“I don’t want to dob people in,” said Mark Langford, Managing Director of GameTraders, “but last time one of our competitors actually put it on Facebook that they were selling early – and it really annoys me that GameTraders seemed to be demonised as the rebels when it comes to street dates, when everyone else does it as well.

“The publishers also say they’ll punish those that break street date, but we damn well know they don’t,” he continued. “And we get sick and tired of being seen as the company that break dates when it’s everyone that gets into this thing.

“It’s just ridiculous.”

Since, technically, GameTraders was not breaking any street date by selling imported copies of Ocarina of Time, and since parallel importing (the act of importing goods from overseas stores then selling them at retail) is perfectly legal, GameTraders attempt to beat its competitors to the punch by selling early was above board in every respect.

There was little that other retailers could do in response except sell Ocarina of Time in the strange, protracted manner that Nintendo was apparently allowing them to.

It’s hard to imagine precisely what repercussions could come from the whole situation, but GameTraders decision has clearly angered a number of key players in the Australian Games Industry, most obviously Nintendo themselves.

But considering the fact that GameTraders doesn’t have any direct dealings with Nintendo, is there really anything the company can do?

“Nintendo do not deal with Gametraders directly, so are unable to penalise them or stop them from selling early,” claimed our retail source. “Nintendo usually punish retailers for breaking their street dates, by delivering next new release late, or closing their account.

“But GameTraders has upset a big beast and it will be interesting to see what ramifications, if any, may come their way, although I suspect we will never hear.

“One thing is for sure, either Nintendo will try and close down the import route — they’ll be investigating the source of supply — or they will ensure Australian release dates on AAA products is in line with Europe.”

As a company, Nintendo isn’t the type to take this kind of thing lying down — key relationships with Australian retailers have been bruised. We attempted on numerous occasions to discuss this matter with EB Games, but a one-on-one interview is apparently against EB’s policy, and what little information we got back from an interview was mostly irrelevant. Except for one small detail: EB confirmed that it had spent a significant amount of its own budget on marketing Ocarina of Time.

That investment, along with what our retail source called a significant amount of money spent at point of sale in-store, meant that Nintendo had pressure from all sides to simply break street date properly, instead of creating a protracted “don’t ask don’t tell” style policy of satiating publishers, whilst stubbornly clinging to a proper release date that, by all accounts, didn’t really exist anymore.

“The launch date remains the 30th of June,” claimed Nintendo’s statement. Strangely.

A statement we received from EB was an interesting exercise in false logic.

“We didn’t start selling the game a week before release date,” EB claimed, “we did, however, make copies of the game available on request so as to not disadvantage our loyal customers.”

In short: We didn’t sell the game before its release date, but really… we did.

Why all the cloak and daggers? Why not just sell the game officially ahead of its release date? Almost all retailers had stock by last Friday — why not just go ahead with a good old-fashioned street break.

The reason, according to our source, was a stubborn sense of pride on the part of Nintendo. No one wanted to admit that a small retailer like GameTraders, via an interesting loophole, had exposed the notion of staggered release dates for the outdated, utterly pointless practice it has increasingly become.

“My personal opinion is that if Nintendo had given in,” began our source, “and allowed retailers to sell early ahead of street date, it would have been forced upon them by Gametraders import strategy — rather than Nintendo controlling its own products release.”

That was an ego blow Nintendo wasn’t willing to take.

[imnage url=”” size=”legacy” align=”right”] THE REPERCUSSIONS
Ultimately, the entire Ocarina of Time incident is an unique insight into the politics of the publisher/retail relationship, a case study in how easily even the smallest niche retailer can disrupt and topple the cease-fire that exists between the two entities. Like a small scale Cold War, GameTraders has brought the nukes into Cuba — but does Nintendo have its finger on the big red button?

“There’s nothing Nintendo can do,” said GameTraders MD, Mark Langford, brazenly. “What we’re doing is encouraged by the government under the parallel importing act – we’re encouraged to import to increase competition. It’s in legislation.

“If they’re going to collude and make it difficult for us to survive in business they’ll be subject to fines. If a publisher decides to punish someone, and use their muscle and power to punish a retailer for selling imports, then they can be fined in a very big way. We’re talking multi-million dollar fines here.”

And unlike the empty threat of publisher fines for breaking street dates — this threat is very real. In 2002 Universal and Warner were fined over $1 million in Australia for “refusing to supply… CDs to Australian retailers who stocked noninfringing parallel imported CDs.” The precise same laws and regulations apply to video game retail. Nintendo may have to take this one on the chin.

There will be repercussions, however — and depending on how Nintendo want to play this, it could end up being either positive or negative for Australian consumers.

Nintendo could see this as a wake-up call for staggered release dates, finding a way to sell AAA video games at the same precise time in all regions. But, conversely, they could use this incident as an excuse to create an even more stringent region locking system on their consoles, forcing consumers to buy games later, at an increased cost.

We know which solution we prefer.

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