Gametraders Vs Nintendo And The Retail Stalemate

Mark Langford sounds a little tired, and you can't blame him.

As Managing Director of Gametraders, Langford's company is at the forefront of another street date drama. After Gametraders grey imported copies of Super Mario 3D Land -- selling ahead of Australia's official release date -- both EB and JB Hifi are reportedly selling official Australian copies ahead of Thursday. But according to Mark Langford, his company is just defending itself.

"If Nintendo would just do the right thing," he says, "we wouldn't break street date.

"We want a good relationship with our local distributors and our local publishers. We don't always grey import -- it's only Nintendo titles, because of the way they've treated us."

To Mark Langford, the right thing is simple: allow Gametraders the opportunity to buy Nintendo's products locally and stock them in store -- but, at the moment, quite simply, Gametraders isn't being allowed to do that.

A link to the past

Mark is very cagey about discussing the issue, but you suspect the situation may have arisen from the Ocarina of Time 3D 'street break'.

After feeling like larger retailers were being given a better deal on Ocarina of Time, Gametraders took advantage of the fact that the game was being sold weeks earlier in the European territory, grey importing the game and selling it ahead of its official release date here in Australia. This resulted in retailers who bought from distributors locally -- EB, GAME, JB Hifi -- demanding they too be allowed to sell ahead of time.

In short -- Gametraders made life difficult for Nintendo locally with Ocarina of Time. Could it be that Nintendo's refusal to deal with Gametraders locally is a direct result of that issue?

A high ranking source within one of the big specialist retailers in Australia, speaking back in June, suggested there may be consequences for the way the Ocarina situation was handled by Gametraders.

“Nintendo usually punish retailers for breaking their street dates, by delivering next new release late, or closing their account," claimed our source.

“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."

Sky's the limit

Fast forward to the release of Skyward Sword, and Gametraders was unable to buy stock of the limited edition from its local distributors.

"The game was available, but then it wasn't," said Mark. "And bear in mind this is the first time this has ever happened.

"They could argue that it was the result of a limited supply of games, but Nintendo needs to be really careful here, this is the sort of thing that the ACCC are very hard on."

It's all about collusion -- if it could be proven that Nintendo deliberately colluded to stop its local distributor from selling copies of the game to Gametraders as punishment for grey importing copies of Ocarina of Time 3D, then it could be fined a substantial amount of money. 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 same rules apply to video game retail -- but these things are very difficult to prove in court.

The first step in the process would be an official complaint to the ACCC, but Mark Langford declined to comment when we asked whether or not he would be pursuing this issue.

For now it appears as though there's a stalemate. Gametraders is well within its rights to grey import games from overseas and sell them in-store and unless Gametraders takes the risk of complaining and taking legal action against Nintendo, it will be free to continue to allegedly block local distributors from buying its products.

It's a legal grey area, and unless someone is willing to test it, it'll remains that way for the foreseeable future. Mark Langford informed us that Gametraders will be grey importing copies of Skyward Sword for delivery in stores tomorrow.

At the moment he's undecided as to when he'll allow the stores to start selling.


Comments

    Now we await Nintendo's reply.

      Indeed. But I expect either silence or some overly careful worded response that reveals nothing.

      It's been interesting following this today. Every retailer is entitled to a fair go, including those that have exclusive deals, but consumers are also entitled to a fair go as well.

      It's a bit of a minefield this one.

    Gametraders ftw

      Semi unrelated, but EB just text messaged me to say I could pick up Mario 3D Land early tomorrow. Hoping that means they'll price match target early too

    I'll read into things before I comment again (still confused like I was in the first thread!) but isn't the heart of the issue the fact that the contract/deal between Nintendo and EB gives EB an edge in front of their rivals?

      It's called business. EB can buy more copies than GT so they get a better deal (and it is highly likely it is only a marginally better deal). It may appear I have a problem with GT doing what they have done, but I don't per se, I just fail to see how when they are sourcing from a considerably cheaper source why that benefit is not flowing through to the consumer in anything other than a slightly pushed forward release date.

        Yeah, I agree with some of this -- people who buy in bulk should get a better deal. That's just business.

        But on the flip side, Gametraders has a right to grey import to get the best possible price.

        This time the issue is they can't get the Special Edition.

        Sure they should get a better deal. But it doesn't mean that Gametrader's shouldn't get access to premium stock such as the skyward sword limited edition's.

        stock which could make the difference between whether someone buy's at your store or at another.

        I think it's poor form that EB and GAME with their extra buying power don't pass the saving's onto the consumer though. But then i suppose Gametrader's would be even further up shit creek

    So Gametraders can't get ANY version of Skyward Sword or only the Limited Editions?

    If it's the former, clearly something fishy is going on.

      Sorry, had to clarify that. It's just the limited editions as far as I'm aware.

        This weeks KMart catalogue has the regular version on sale. Does anyone know if KMart/BigW/Target are getting the Limited Edition Bundle? Maybe they should start complaining and grey importing too (I'm aware KMart already does for all their budget titles).

    I hate the way Nintendo manage their operations here. Why can every other publisher manage world wide release dates? Imagine if a game like mw3 was released a week or two late here? It would be madness

    I think that gametraders is doing a good thing. Somebody needs to stick it to Nintendo AU

    Gametraders = GOTY 2011

      So why is it that we don't have a category for Best Games Retailer yet we have one for best mobile broadband provider?

        Because that's one of the awards we're running across all the sites -- Giz, Lif, Kot. It's the award that has most broad appeal across all three site. :)

    Start selling or start profiteering?
    And what are all those imported PS3 and XBox 360 games doing on the shelves if you only grey import Nintendo titles.
    Pull the other one Mark Langford, it plays Jingle Bells!

      What exactly is wrong with them selling parallel imports? It is specifically allowed by the law, and an important mechanism to keep the local distributors honest (although, we also need the ACCC to do its job for this part to work).

        My issue with them selling parallel imports is that they do so at Australian Retail Prices. One of the reasons the Government encourages companies to parallel import items is to lower prices. If they keep the price the same it is just price gouging.

          PIxxPixx explained it (excellently) in the other thread on this topic, I guess you ignored that, and probably will ignore this too, but nevertheless i'm going to waste my time and re-hash what he said:

          1. When they grey import a game that they know is going to sell, they hold the price at Aus RRP because that extra margin becomes their insurance against games that flop, despite the fact that they order many copies because it is expected to sell well. Giants like EB can afford to absorb flops, because they're are big enough to wait around for the hits to come out (MW3, Bethesda games). 2 Badly timed flops, and GT could realistically be closing down (at least some) stores.

          2. As a smaller, more personable retailer, GT Does stuff that big retailers like EB/JB do not. Eg. they run card clubs, tournaments, and competitions. This stuff costs money.

          I'm no fanboy, one way or the other, in fact I put my Diablo 3 pre-order in at EB a few days ago, but perhaps you should consider that there are other market forces at work here before you start throwing bibles around and accusing GT of reckless profiteering.

            Selling the games at retail? Are you serious, Gametraders were selling Gears Of War 3 for $59.95 day 1! and there is also too many other titles to sit here listing off how much cheaper they do than retail. Think before you speak mate otherwise you just come off looking like an idiot.

    If Nintendo would just release things world wide on the same date we wouldn't have this problem in the first place.

    While we're at it, I still think its ridiculous that we're being gouged at EB/JB etc for new release games that we can buy offshore at a decent world wide level price ($60 for a new release, not $100)

      Yet everyone seems to think it is OK for GameTraders to grey import these same items and charge the Australian RRP of very close too.

        It's not like they're importing directly from Ozgameshop you do realise that right? They have to pay the distributor to have it imported and then pay import costs. So by the time the import gets to Australia, they still have to charge around a RRP (usually about $10-20 cheaper) to get any profits.

        Now on the actual subject, you can't really blame Gametraders for trying to get ahead. I can understand why Nintendo are doing this too, but the way they're going about it is wrong. They could've at least informed Gametraders that they are blocking them rather then leaving it up in the air.

          As a general rule, if a retailer has to pay their wholesaler more than a consumer has to pay for a copy from another source, that retailer is pretty damned screwed.

            I'm sure the reason for charging close to Australian RRP is because people will buy the product at that price. If everyone was doing parallel imports and charging lower prices, then they wouldn't be able to sustain sales at the higher price point.

          While I appreciate your comments, consider why we often charge retail ... we don't have the buying power of EB or GAME. Yet we still pay the same rent they do, pay staff, etc. Then check our catalogues where we reduce prices considerably or push out special deals via our member card - all at well under our competitors pricing.

    Is it even a legal grey area? There's no parallel import restrictions on games in Australia any more, if they can source cheaper / earlier from overseas then that as far as I'm aware is completely legal for them to do. If there's any grey area aside from a very minor moral one about supporting local jobs, then it's what Nintendo can legally do to 'encourage' them not to short-circuit the process.

    Perhaps a starting point for Nintendo would be to stop screwing us over and release the games at the same time in the UK and Australia? They're one of the largest games publishers in the world, surely this isn't impossible for them.

    I could see Gametraders breaking street date on Skyward Sword, even by just 24 hours, just to fuck over EBs midnight launch plans. After all the Mario 3DS + Zelda launch has been reduced to a Zelda launch this week

      Ummm... what midnight launch plans? To be honest, I haven't heard of any midnight launches that EB Games or any other retailer is holding for Skyward Sword.

    "We don’t always grey import — it’s only Nintendo titles"

    Rubbish. I've bought games from Gametraders before and received an EU copy. In one case not being able to buy and use DLC on PS3 a month later...

    Hey guys, it's not just Nintendo who releases games on different dates to different regions. Same with pricing. Stop hating Nintendo for it.

    >Gametraders will be grey importing copies of Skyward Sword for delivery in stores tomorrow.

    Ooooh yeeeah.

    I'd like to see this become a rap battle

    The real issue is why isn't GAME following suit...

    Buying games locally is a joke. If you're not importing, you're being ripped. I'd like for local retailers to do well and be able to offer competitive prices but it seems like it's all about money grubbing and screwing the consumer.

      Keep in mind, generally games have a profit margin of 25%
      What you are really being ripped off on is the accessories like HDMI cables that are sold for $50 that have a $2 cost price.

      I disagree. For the last nearly two years now, I've hardly ever paid more than $40 for brand new games at retail. If you're paying full price at retail, then you're doing it wrong.

        I'm reffering to specialist retailers.

          And department stores generally sell below cost when they have games that cheap.

            That's ok, I was replying to jellyarrow anyway :P

            And... yes, they probably are. What of it?

    Nintendo games are not the only thing they're gray importing and charging full Australian retail price for. GameTraders is asking for equality with other retailers, but have you ever tried asking them to price-match of match trade-values with other retailers? They're asking for equal treatment, but refuse to provide equal treatment to the consumer. Just recently I attempted to trade a number of games into GameTraders and was quoted $65 in trade-in value for very recently released games. When I went to EB Games, they gave me $140 trade-in value.

    And on price-matching, when GameTraders were selling Gears of War 3 for $59.95 a couple of days after release, my local EB price matched them, even though they lost money on the sale.

      price-match OR match trade-values*

        Im a GT Employee. When it comes to trade in prices yes, we do usually do offer less. I dont know what games you where tradeing in, or what store you tried to trade it so I will just make an example.

        Skyrim's RRP is $109 or $99, cant remember which. My store has it for $79, while the EB a few shops away has it at full price. If you want to trade Skyrim to us, we will offer less then the EB, we will offer about $50-$55 for it. EB will most likely offer somewhere around 70 maybe more. EB will put that traded Skyrim on their shelf for only $5 less then a full retail copy, we will have it for $69.

        The reason EBs trades in prices are higher is because they charge more for their second hand games. People complain about how much EB charges for these second hand games, this is why. Its a double edged sword.

          Point is, GameTraders is expecting equal treatment to other retailers from the games companies and distributors, but, is not willing to provide the same equality to its consumers, the ones who allow the business to keep running. Which really speaks for why I usually take my custom elsewhere.

            Except that your viewing it on trade-in's.

            Which is a completely different issue. And in fact Gametrader's is probably offering the same percentage of cashback as to what they sell it for.

            For example if EB buy's it back at 70 and then resells it at 95. they make a 35% return on there investment.

            Or using the number's provided for gametrader's, they buy it at 50-55 and sell it at 69. Giving them a return on investment of 38%(50)-25%(55).

            EBgame's has the luxury of buying copies of games back at higher prices. Because they have a higher amount of traffic. It's the same reason that JB,Target,BigW generally have the best launch day prices. Because they offset the difference with the ability to sell other stock.

            Gametrader's don't have a choice in the matter, they sell there used games at lower prices because if they were selling them at the same price 90% of people will still go to EB, because EB's Store Credit is useful in many more places than Gametrader's.

            I mean hell to get to my nearest Gametrader's its a 35minute drive, there are about 10 EB's and Games between here and there. Buying from an Australian retailer is all well and good. But an hour plus trip to buy a used copy of a game at the same price as the EB 5 minute's away charge's is never going to happen. Something being 69 instead of 95 is going to have a higher chance of me putting in that effort.

            If as a consumer you exist solely on the used games market, you will be giving up roughly the same percentage of the trade in price to get your next game. difference being that if your trading all your games for 50 and buying them for 69, your spending less than if you were trading them for 70 and buying them for 95

        EB games sell prices are considerably higher than Gametraders. This is so people will support their local Australian retailer over a Billion dollar US company. Why let someone trade in a game for $10 when it's going to be on the shelves for $19.95 and this isn't even after deducting franchise fee's. EB Trade for more, simply because they charge more, they can afford it. It's not a matter of being stingy, it's a matter of doing what you can afford to stay afloat.

          So what your asking is for us to charge more on both our new and prepaid games so that you can get better trade deals? I think most consumers will disagree with you on this point.

      Yes, but that's ALWAYS been EB's business strategy. Jack up the price, and if a consumer can be motivated to do the legwork for THEM, they'll pricematch. The majority of customers from EB WON'T do this, far outweighing the loss they make in the few pricematch sales. Not only that, but step by step, it slowly sends the genuine competitors offering cheaper prices broke due to vampired EB sales. It's brilliant in its villainy.

        When I've been at my local EB, every other customer there always pays full price. Doesn't ask for a price-match or a better deal.

        I agree most consumers probably won't bother doing the legwork, as you put it, and just pay whatever the asking price is. Especially if you aren't a gamer and you are buying it for someone else.

          In my local shopping centre, there is a JB, EB, Harvey, KMart, Target and Game store. Every game I've brought I've been through them all to find the best price. Generally if one has cheaper, all follow. For the sake of $10 (after postage from play-asia (depending on postage type)), I'd buy it in Australia. Have it now, rather than wait a few days.

        If a consumer chooses not to get the best deal, or the best value for their money, that is not the fault of the business. That's the fault of the consumer.

          I've completely lost track of your point. A minute ago you were blaming gametraders for lousy trade in prices, but someone points out thats because they sell for less than eb, and suddenly its the consumers fault? Which is it?

            This particular reply was in direct response to jellyarrow's comment. It still stands with my original point. If someone decides to trade something in at GameTraders, they're not getting their best value for money.

            Me, however, I will always go out of my way to get the best deal I can without resorting to importing or ordering online. GT wants equal treatment as a business, but does not provide equal treatment to their customers.

        I'm an employee too.. I think you misread or replied to the wrong comment. I am all for the GT way

          ment to reply to the comment above, sorry :)

    Having worked in retail, I think I could shed some light on the situation. Distributors (ie, Nintendo) strike deals with retailers to stock their products. Sadly for GameTraders, there's a lot of competition out there; Big W, Dick Smith, JB, EB Games, GAME, Harvey Norman, Target, KMart, Toys R Us, - these guys probably buy most of the stock, leaving smaller retailers to go begging for the scraps.

    Now as with all distributors, the price they sell the products to the retailer is dependant usually on their past sales performance. EB Games will get, say, 2 million copies of MW3 at something like $69/unit because they sold, let's say, 1.5 Million copies of MW2 last year at, for example, $79/unit. Because they made the distributor happy, EB will be getting a discount, meaning they get more profit, and are quite happy to sell lots and lots.

    I don't know the full story, but if we look at GT's history you have them doing all the wrong things to woo the distributor, mixed with the fact that they're small time and then only concentrated in Victoria; the "shopping capital of Australia".

    Nintendo probably have no need to sell to them, and as they throw more and more tantrums, have even less of a reason.

    And they're actually adding to the problem. Folks like Gerry Harvey are looking for ways to tax "grey imports" every day, having this case will only strengthen his resolve. Meanwhile, customers of everyone else in the country are annoyed because some internet savvy nerds flocked to GT to buy the game they preordered months ago early. And this reflects poorly on both the retailer and, in this case, Nintendo.

    I think it would also be a good idea to explain WHY street dates are important, and it's usually about brand marketing... TV ads aren't cheap, nor are print and online ads. Neither is putting on midnight launch parties. It costs money to put those "November 24" lettering out there, and the publisher should have the right to make back as much as they can with those ads. By the way, it costs a lot to REMOVE an ad from television, too - so if everyone's buying a game that's being advertised to come out next week, it would be very messy. Those who are waiting miss out, or are forced to buy them on eBay at an inflation.

    Personally, I don't see why we can't all wait four days, knowing you're buying a legit copy, with all the warranty and compatibility, and the ease of trading it in later without any dramas.

    To summarise; GameTraders need to grow up and act like a real retailer. The "buying power" game can be cruel, but we all have to play it. By going to the grey import mesures, they're looking like a seedy, back alley shop you'd want your kids to avoid.

    Gamers need to be patient; don't worry, you can always NOT read spoilers on the internet.

    Those who CAN'T wait should take it upon themselves to import, and not keep feeding this stupid cycle with retailers who believe they're somehow special.

      i was under the influence harvey and that had backed off the import market. Seeing as they are never going to be popular for singlehandedly forcing people back into their store for overpriced product's.

      Not to mention that harvey made his money by doing exactly what he is fighting against today. It's all good while he's doing it to make money but when people do it so he can't, it's not very fair.

      As for nintendo not wanting to deal with them, i believe they don't have much of a choice in the matter or the ACCC will go after them. After all it's the same sort of competition BS that forces telstra to wholesale to everyone. And causes optus to complain if telstra try's to actually compete with them.

      As for the four day's, that's nintendo's fault if we saw worldwide release's this wouldn't be an issue whether it was just gametrader's or if there were 20 small retailers doing the same thing.

      Gerry Harvey's problem with internet mail order is that the sales don't pay GST or Customs import duties.

      If a retailer does their own parallel imports, the quantities they are importing would easily exceed the duty free threshold. And as an Australian business, they would be charging GST to their customers.

      So GameTraders is most likely already paying the additional fees and taxes Harvey wants applied to individual private importers.

      Game Traders have the right to by pass local distributor if they can get a better deal from foreign distributor (even if it's one in the same). This helps to define the true value of the product instead of having to pay an invisible Australian mark-up price that they used to blame on currency.

      Nintendo is at fault here, for forcing high prices to Australians. But things are changing as people look to import with a high dollar value which pushes retailers to ask for a fair price.

      On a side note, Gerry Harvey is looking to buy into crony capitalism? What a joke! never reward the weak. Let the strong reward themselves.

    Oh, I would also add that when Ocarina of Time 3D was released early, Nintendo called off their midnight launch party which they advertised they were giving away signed copies of OoT 3D (by Shiggy and Eiji). Those copies probably went home with Nintendo employees.

    In an article that mentions 'grey imports' six times, perhaps it would be worth mentioning what exactly grey imports are for those who do not know the jargon.

      Grey Importing is when a company, in this case GT imports a game from overseas and the sells it instead of going via local disributors. GT does this due to it being cheaper then buying local.

      Like I brought a pair of Sennheiser in ear headphones via grey import. I paid $40. Retail here in JB $119. Same product just brought over from another country where they were a ton cheaper. Everyone should buy grey import until the prices come down. Our prices in general are ridiculous.

    A withholding of supply like this smacks of anti-competitive conduct. I would like to see the ACCC investigate this.

    I may have missed something by looking at the banner on a phone but is that Mortal Kombat they are selling? Is it no longer RC?

      Disregard it's the DC one. Damn you iPhone screen :(

    SHUT UP NINTENDO

    You know what people are doing with these imported games? They're BUYING them Nintendo... Don't you like money? Would you prefer people pirated your games instead?

    If they didn't blow their money on advertising 'release dates' over the game itself, then a broken date would incurr no loss.

    And if wholesale prices were the same no matter the quantity of order then the little guys would survive next to the bigwigs.

    I read these comments everyday like most of you and I just don't think that some of you understand what the issue really is. Nintendo are the local distributor of the products in question, but like any wholesaler/retailer they are under no obligation to anyone to sell any of their product. If they choose not to supply product to the likes of Gametraders then that is their right as a business. Now for a company like Nintendo who distributes product through many retail channels a small company of 40 stores is small fry to them anyway and right now they have the luxury of not suppling to them as they have many other channels they can move their product in.

    I am unsure why Mark Langford would want the higher priced local product anyway to sell as his Franchises would make less money anyway. He is actually better off sticking it to the local Nintendo distributor anyway. But that really is the Aussie way, stick it to everyone and try and pull someone down when they are on top. What example is Mark Langford setting as an Australian company?

    As consumers we are very driven by price these days. We all want it for nothing, but there is only so long that any business can survive with the likes of people like us trying to get the product for the cheapest price possible.

    You all want top dollar for trade in's, but then you want to pay as little as possible for the pre-owned game?? WTF??? I don't think you get what you are saying.

    In any case lets see what happens when everything is digital. You can bet that the restrictions that will be placed on downloading content via country etc are going to be stringient. So all of you who are complaining now, to me the future of the video game business is a whole lot worse. You won't even have a physical copy of your game to trade and your Publisher will charge you what they want, no discounting, no importing. Think about it for a minute.

    I think consumers should make their own choice and they do right now!!! They shop at Big W, EB, JB or Gametraders or they buy cheap grey imports online. I don't see what you are all complaining about. Buy the game the way you want to buy it and stop complaining.

    I am unsure why items such as this are even newsworthy of Kotaku!!

      It is newsworthy. Nintendo is skirting a line here -- if it can be proven that Nintendo used its influence to stop distributors selling to Gametraders, Nintendo could be fined a lot of money. That's the story here.

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