Nintendo Responds To Gametraders On Skyward Sword/Super Mario 3D Land Situation

12 years ago

November 22, 2011 at 11:45 am

Super Mario 3D Land is now fully available in most specialist retailers in Australia, ahead of its official release date this Thursday — a direct result of Gametraders’ decision to grey import European copies of the game. Yesterday Mark Langford, the Managing Director of Gametraders claimed that decision was made after stores were unable to purchase Limited Editions of the upcoming Nintendo title The Legend of Zelda: Skyward Sword. Today, Nintendo sent us a response to those claims.

While Mark Langford stopped short of accusing Nintendo of deliberately stopping local distributors from selling stock to Gametraders, he did claim that his inability to buy copies of Skyward Sword’s Limited Edition led him to grey import stock from overseas.

“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.”

Mark Langford claimed that lack of local stock led him overseas.

“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.”

Nintendo has a right to sell stock directly to any retailer it chooses, and it also has the ability to not sell to retailers under the Trade Practices Act. However, colluding with independent distributors in Australia to hold back stock from retailers is illegal. While Mark Langford stopped short of directly accusing Nintendo of doing this, there was a suggestion that Gametraders was receiving poor treatment compared to other larger retailers.

Nintendo denied this outright, claiming it encourages all retailers — including Gametraders — to buy from local distributors.

“It is simply incorrect to say that Gametraders have been denied the opportunity to buy Nintendo products locally and stock them in store,” claimed a statement from Nintendo. “All companies are free to purchase Nintendo products from our distributors such as AID and AFA and are encouraged to do so. We strongly support local supply where revenue feeds the local Australian market.

“Our company position is that we can only trade directly with companies that meet our financial credit criteria. Gametraders have sought direct supply from Nintendo however they have been unsuccessful on more than one occasion.”

This is the first time that Nintendo has publically responded to Gametraders on this issue. It’ll be interesting to see if Gametraders pursue this further, or simply continue to grey import stock from overseas. Regardless, Nintendo seem to be paying close attention to this situation.

Comments

64 responses to “Nintendo Responds To Gametraders On Skyward Sword/Super Mario 3D Land Situation”

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Angered Catfish

November 22, 2011 at 12:00 pm

“Our company position is that we can only trade directly with companies that meet our financial credit criteria. Gametraders have sought direct supply from Nintendo however they have been unsuccessful on more than one occasion.”
That’s the paragraph that sticks out to me, I might be understandinfg this wrong but does it mean that Gametraders would need to go through AID/AFA, while the bigger companies deal with Nintendo directly?

Reply
1. Mark Serrels
  
  November 22, 2011 at 12:02 pm
  
  That’s exactly right.
  
  Reply
  1. Zap
    
    November 22, 2011 at 12:08 pm
    
    Hey Mark,
    
    Can we get a rundown on what’s involved in going through AID/AFA, or what other companies have to do that?
    
    As in: is it entirely fair to say “You’re such a small company, you need to do this to get our stuff” and GameTraders is saying “AW HELL NAW!” even though it’s a valid and fair request?
    
    Not saying it is or isn’t, just that it would help me understand what the hell is going on?
    
    Reply
    1. Zenon
      
      November 22, 2011 at 12:18 pm
      
      I wouldnt mind hearing more about these AID/AFA distributors too. They seem like one of those unseen middlemen, where alot of things can happen affecting supply and pricing.
      
      Reply
    2. Mark Langford
      
      November 22, 2011 at 1:10 pm
      
      Hi Zap,
      Our stores source most games through AID and AFA who are distributors of games for retailers that do not deal direct with the publishers.
      We haven’t dealt direct with the publishers for many years as there is no incentive unless you are a major buyer where you will receive big rebates. Some of the big department stores receive “sale or return” which has never been available to us even when we did dealt direct.
      We also parallel import games of all formats (not just Nintendo) to allow us to compete on price because some of the big department stores use games as loss leaders, selling at under the distributor’s prices.
      The rents in some shopping centres exceed $200,000 PA and if you add the cost of staff you need to make a margin to stay in business. The margins in games are very low when you take into consideration having to dump dead games under cost price and this is why we are diversifying.
      Generally we do not break street dates, the majority of broken street dates this year have been by our competitors, but we will break street dates when we are put at a competitive disadvantage as is the case with Zelda Skyward Sword limited edition we were cannot source locally
      We have sourced Zelda Skyward Sword limited edition from overseas and we will have these available in store by the official street date.
      
      Reply
      1. Zap
        
        November 22, 2011 at 1:19 pm
        
        Hi (other) Mark!
        
        Thanks for the considered and detailed response – was completely unexpected.
        
        Based on your response, could I then say that retailers dealing directly with the company (like Ninty) is an expensive proposition, unless you’re buying serious quantities of not only the current game, but a range of products? ie: You’d need a huge scale operation (like EB/GAME who are in pretty much every town, even rural) to make it worth your while?
        
        If so, is it a major difference in cost between direct purchase and purchase through a middle-man?
        
        I’m assuming this also means that most mum+dad stores or very small solo or small chains end up buying through AID/AFA because they simply can’t throw down enough money, or main suppliers feel it’s not worth their time to deal with Zap’s Video Games Pty Ltd and a million other similar stores, so they get shunted over the middleman?
      2. Mark Langford – MD of Gametraders
        
        November 22, 2011 at 2:19 pm
        
        That is correct Zap, the publishers are not interested in dealing with the small operators and as a result there are hardly any small operators left in this country, 10 years ago there was about 150 independent games shops, today it would be under 10.
        
        I would like to clarify that we are able to source Nintendo products from the Australian distributors; it is only ZELDA LE that we can’t source locally.
2. Jim
  
  November 22, 2011 at 12:10 pm
  
  Correct
  
  Reply
Angered Catfish

November 22, 2011 at 12:10 pm

I can kind of understand why Gametraders would be upset then. I wonder if the AID/AFA stock the limited editions, going by yesterdays article it kind of seemed like this wasn’t the case and that Gametraders aren’t able to stock limited editions of Nintendo games.
Would that count as holding back stock I wonder, or because standard versions are available for them it doesn’t count?
It’s an interesting development, especially since Gametraders don’t have these issues with any other publisher.

Reply
qbngeek

November 22, 2011 at 12:11 pm

I don’t think Gametraders are as innocent as they are trying to appear to be. From day one I have had the feeling that they are grey importing and breaking street dates purely to get sales by being the first one selling.

Reply
1. Andrew Nesvabd
  
  November 22, 2011 at 12:41 pm
  
  There’s no reason for them to grey import if they’re on an equal footing to other retailers – once a street date is broken it’s broken across the board; effectively all it does is change the release date. With most publishers this wouldn’t be so profitable, but Nintendo of Australia has always been very odd about its release scheduling and despite having a product sitting there, they’re happy to wait for whatever projected maximum sales date/promotional advertising campaign to end before selling; I’ve always had the impression that their business model is somewhat archaic.
  
  TL;DR: You can’t blame Gametraders for being opportunistic within the laws that exist in Australia when it’s entirely within Nintendo of Australia’s control to remedy the issue and they seemingly choose not to.
  
  Reply
  1. James
    
    November 22, 2011 at 1:21 pm
    
    Even if they were given equal footing with other Australian retailers, if that price doesn’t have parity with equivalent international prices then there is still reason to parallel import. If anything, we need more parallel importing to keep the local wholesalers/distributors honest.
    
    Reply
  2. lol
    
    November 23, 2011 at 1:04 pm
    
    name the games that gametraders have broken aside from Mario 3d and zelda ocarina of time. then name the games broken by JB HI Fi and the other majors. shouldnt talk if you dont know what you are talking about
    
    Reply
NegativeZero

November 22, 2011 at 12:12 pm

“You need to pay us more to get stock from us directly, on time. Otherwise you have to deal with our other distributors”

Also I thought the core of the issue here was Nintendo only allowing EB to stock most of their limited edition stuff?

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PuppyLicks

November 22, 2011 at 12:30 pm

So is it possible (if Gametraders are currently dealing with AID/AFA) that they are getting the bum deal from AID/AFA and not Nintendo themselves?

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1. Mark Serrels
  
  November 22, 2011 at 12:35 pm
  
  Maybe, I’m guessing it might be more likely that Nintendo only sold LE direct. Hard to tell without talking to distributors, which I’ll most likely try to do when I get the chance.
  
  Reply
buckE182

November 22, 2011 at 12:30 pm

This has always been Gametraders biggest problem, not only with Nintendo, but other big publishers. Gametraders has to buy through AID/AFA etc at inflated prices. Thus making them less competitive than the bigger stores. This has resulted in Gametraders greay importing stock.

I have worked at EB, JB, Gametraders and almost bought a Gametraders franchise with my father a couple years back. I have seen the prices of stock first hand. At JB, a first party Nintendo game like Twilight Princess would cost JB ~$74 – directle from Nintendo. The same game would cost Gametraders at about $10 more from AID. How can Gametraders compete? JB sell so many items that they can use games and DVD’s as “loss leaders” and sell them at cost or slightly above. So with a buy price of $74, JB can sell for $79 and cover themselves easily. Gametraders obviously can’t match that price because they a paying more than that just to get the game. Hence the need for grey imports.

Nintendo’s statement about credit criteria needs to be looked into. Why can it refuse direct sale to Gametraders?

The next thing to look at is obviously the cost of games here. Not the actual cost of RRP but the cost to stores from publishers. Nintendo Australia shouldn’t be charging $74AUD to sell a first party game to JB when the same game is sold in the US at retail for $60USD and in the UK for 40 pounds. There is no chance of local game prices being reduced when the initial buy price is so high.

Reply
1. Mark Serrels
  
  November 22, 2011 at 12:32 pm
  
  Great post.
  
  Reply
  1. Batguy
    
    November 22, 2011 at 1:52 pm
    
    An interesting point about the markup chain too, which hasn’t been clear to me from some of your previous stories: sounds like the intermediate distributor that sits (unnecessarily?) between the publisher and some retailers adds an instant $10 to the price.
    
    Sounds like it might be worth investigating the role of AID and AFA, Mark.
    
    Reply
    1. Reggie Miller
      
      November 22, 2011 at 2:29 pm
      
      Why would you want to ivestigate AID and AFA for. You just need to go learn business 101 about any industry. It is the same for almost anything
      supplied into Petrol Stations , Supermarket chains , bottleshops etc.
      
      Nintendo or any publisher for that matter do not have a supply chain solution that can adequately distribute stock into the entire retail chain. So they handle mass merchants and then sub distribute to smaller distributors who then get the product out to the smaller retailers. And by smaller retailers you would be suprised that it includes places like Harvey Norman.
      
      Like it or not it is how capatilsm works. It is much easier to buy and ship product in bulk , than it is to get to smaller stores. Its called Economies Of Scale.
      
      Stop painting companies like the publishers , the AID’s , AFA’s , EB’s , Games of this world as evil , they are not. They are just trying their best to survive also. Gametraders are also just doing what is needed to be done if you cant compete against the giants , and that is adapt. Good luck to them innovating , the consumers get the benifits of them thinking outside the box.
      
      Reply
      1. Batguy
        
        November 22, 2011 at 2:45 pm
        
        Dammit, reply fail – see my reply to Morf below 🙂
2. Morf
  
  November 22, 2011 at 12:43 pm
  
  Nail on the head buck – it is the reason why the rise of the internet distributor and the grey market has flourished.
  Until the publishers stop treating our ‘colonial backwater’ as an easy target to make big margins, the continued dissatisfaction between consumer and local distributor/ local distributor and publisher will continue to occur at the chagrin of all involved.
  
  It’s becoming a broken record and everyone is losing…
  
  Reply
  1. Batguy
    
    November 22, 2011 at 2:44 pm
    
    Woah, woah, calm down!
    
    I was mentioning it in the context of the “why do our games cost so much” discussions. AID and AFA introduce a significant added cost on top of what is already high compared to the rest of the world. If this cost is completely justified, awesome – but why exactly are they needed?
    
    Maybe “investigate” was too loaded a term though, implying something along the lines of a Today Today expose. I was instead curious about what role these guys actually play in the distribution of games in this country. e.g. You are right, I was surprised to learn that Harvey Norman is a store that relies upon them.
    
    These middlemen obviously play a pivotal role in this Gametraders discussion, so I would be interested if Mark wrote a story that explains how they work, why they add this cost to our games, if and why they restrict what is available to end consumers (e.g. the limited edition Zelda?) and whether they are actually needed in this day and age. Could they in fact be replaced with a more streamlined web-based system at Nintendo’s end? Probably not, but I don’t actually know!
    
    In short, I probably do need a business 101 lesson, and was asking Mark if he could provide it for me…
    
    Reply
    1. Reggie Miller
      
      November 22, 2011 at 3:08 pm
      
      Sorry for the over reaction , I just see the wrong guys getting the blame all the time and I snapped.
      
      In this case , no one deserves blame , it is just simple business.
      
      There are far to many stores out there for a publisher to be able to get to all of them directly. So places like AFA and AID exist so that the “rats and mice” customers get the service they deserve.
      
      Sub distribution is needed to help out the enitre chain , otherwise the costs and efforts involved to the publishers to service the little guys would see them end up just dumping them and only supplying to the big guns , thus further reducing competition.
      
      Gametraders need to come up with new smarts to complete againsts the giants , and they look like they are trying to do that very well. I hope they continue to innovate as us end users reap the rewards in the end.
      
      Reply
      1. Joshy206
        
        November 22, 2011 at 5:20 pm
        
        Thanks for the info!
        
        Not really surprised HN is one of the stores forced to go through the roundabout way; I don’t know anyone who gets their games from them specifically.
        
        Anywho, I now get the need for these distribution channels, but why, then, does Nintendo (and, I would assume, other game companies too) deal directly to anyone at all? Surely all this does is make the big shops bigger and the small shops smaller. That’s taking capitalism to Ayn Randian levels.
        
        Secondly, where do limited editions come into it? This is something that remains unaddressed by Nintendo.
        
        But, I’d like to point that every shop has carved out a specific niche. EB has the limited editions, JB has the electronics and DVDs alongside games, Gametraders has memorabilia and merchandise (at least, the one I went to before it closed did) and GAME is mid-range price and relatively abundant. I like that every store is different.
      2. bdc
        
        November 22, 2011 at 9:18 pm
        
        They deal direct because its in their interest, EB Games, Big W/Dick Smith, GAME (probably only through use of their UK arm realistically, at least when they started out), etc would each buy more than the Australian distributor, that’s why they deal with these guys.
        
        It’s also in publishers interest to have a few large players, they can devise marketing strategies, easily control pricing, publishers prefer to have a few big players, but they need smaller players to keep the big players from demanding too good a deal.
        
        If you are interested in retail, go research WalMarts business practice (they is a doco too), how its both a boon and burden to deal with them, and that’s the sad nature of business these days, it also means when you see those “sales”, they are manufactured, almost without fail every sale you see is a deal setup between publishers and their big brand retail partners.
        
        They will sometimes take a loss on an item, but its incredibly rare, big name retailers like EB/Big W etc get good contracts where they can actually return stock for items that sell poorly.
        
        I doubt a company like gametraders gets that sort of deal.
        
        The rebates on my profit and loss reports for the store I ran for a fortune 500 company was insane, the amount of recalled stock for games that sold poorly with deadlines so the company could get a refund was more than you would expect too.
        
        And even during huge sale periods (think mid year 1/2 price mayhem) we would still usually be running >20% gross margin, maybe dipping to the low 17% when we sold a lot of console deals and few games/controllers.
  2. Batguy
    
    November 22, 2011 at 2:45 pm
    
    Dammit, reply fail – see my reply to Morf below 🙂
    
    Reply
3. Jake
  
  November 22, 2011 at 12:43 pm
  
  +1, awesome post.
  
  Reply
4. diaglyph
  
  November 22, 2011 at 2:09 pm
  
  Great post!
  
  I certainly can’t understand why Nintendo would price the game at $74 (similar would apply to other publishers, who’s RRP usually goes over $100). I’m sure Nintendo and other publishers could easily knock off $20 off their price. Then RRP could be set at around $79 – which is where new release games should be!!
  If this were to happen, I would certainly be more inclined to buy locally, instead of importing.
  I mean really, which would I pay: $99 for local Zelda (standard edition) or $52 from ozgameshop – hmm gee what a hard choice that is.
  If the game was priced at $79 locally, even tho that would make it $27 more than ozgameshop, the fact that I would get the game straight away (instead of waiting 2 weeks) would make it easier to accept the price difference – instead of a $47 difference as it currently is (for $99 I could get 2 games from ozgameshop)!!
  
  Reply
dmag87

November 22, 2011 at 12:32 pm

Colour me confused

Reply
1. BR!4N
  
  November 26, 2011 at 10:25 pm
  
  You mean color. Its not pronounced kuh-lawr. It’s kuh-lur. Color.
  So what, I can’t be patriotic without looking stupid?
  
  Reply
Mase

November 22, 2011 at 12:40 pm

Well is there a Gametraders store with a Nintendo shop stuck on top of it like EB Games has with their “Nintendo Experience”? No? Well that settles that then

Reply
1. scree
  
  November 22, 2011 at 2:15 pm
  
  Not sure if trolling…
  Or just stupid.
  
  If that isn’t an unfair advantage, what is?
  It seems that Gametraders is getting locked out simply because they don’t have the numbers that EB, Game and JB have. I just want to add, these are all owned by international companies where as each Gametraders store is a franchisee.
  It’s pretty unfair what Nintendo are doing.
  
  Reply
  1. Mase
    
    November 22, 2011 at 6:16 pm
    
    I was trolling sir
    
    Reply
    1. scree
      
      November 22, 2011 at 9:30 pm
      
      Well I’m glad it wasn’t the latter.
      Still, EBGames have a huge advantage that way
      
      Reply
      1. lol
        
        November 23, 2011 at 1:22 pm
        
        those nintendo stores on top of eb are lame anyway.
Joshy206

November 22, 2011 at 1:35 pm

So everyone can deal through AID and AFA, but only a few (with good credit) can deal directly through Nintendo?

Why is credit a factor here, and why does Gametraders have bad credit?

Reply
1. Angered Catfish
  
  November 22, 2011 at 1:53 pm
  
  It is a strange way to phrase it, isn’t it? I would imagine it’s more Gametraders can’t sell the numbers that Nintendo are wanting, and only deal with the bigger franchises. It might be a case of “you need to buy x amount of copies to deal with us directly” and it’s not feasible for Gametraders to live up to that number, it’s hard to say though.But if that locks them out from buying limited editions then it is an unfair advantage.
  
  Reply
2. Mark Langford – MD of Gametraders
  
  November 22, 2011 at 2:10 pm
  
  We don’t have bad credit Johy206, I can honestly tell you that in my many years in business that there has never been a time that we didnt pay our bills on time.
  
  For us to deal with a publisher direct we would have need a $1 million dollar credit facility and I suspect that unless you are a big public company they are not prepared to take the risk.
  
  Reply
  1. Joshy206
    
    November 22, 2011 at 3:19 pm
    
    Okay, so I think I understand the situation, but I don’t get why it is. What’s the risk? I don’t exactly see the problem if Nintendo dealt with GT directly. I get what Zap is saying about home loans, but why is purchasing games you will then sell like purchasing a home loan?
    
    Reply
    1. Zap
      
      November 22, 2011 at 3:42 pm
      
      I think it’s along the lines of buying something on credit.
      
      For example, EB buys their 1,000,000 copies on credit, with payment due say within three months, plus interest (if it exists), rather than up front before goods are handed over. EB selling those 1,000,000 units actually pays for the “loan” Ninty gave them, plus they keep their profit after it.
      
      Ninty says “Hey, you’re a billion dollar business, if you default, we can get our money back”. If you aren’t big enough for them to extract their money from you if you default, they just don’t lend it to you.
      
      So like a house, you borrow money to pay for an asset, then pay that loan back. If you fail to pay it back, they take your house. In this case, they’d take whatever they need from your liquidated business to recoup their losses.
      
      Or, at least, that’s my rudimentary understanding of the economics involved.
      
      Reply
3. Zap
  
  November 22, 2011 at 2:11 pm
  
  I’d guess it’s not about GT having *bad* credit.
  
  It could simply be like a home loan, or more directly:
  
  Ninty says “You need to buy at least $50M worth of stock” then says “With your cashflow, you won’t be able to service that debt”.
  
  Reply
Inside

November 22, 2011 at 2:02 pm

No one seems to have brought up that the larger buyers can organise exclusive deals (particularly with Limited Editions) due to their buying power… This means smaller stores have NO chance.

Reply
Mike

November 22, 2011 at 4:00 pm

Thanks for all the clarifications Mark. I have to say, it is a damn pity there aren’t more Gametraders stores in WA. I do realise that there used to be several others, but there were very specifically two of them that I was glad to see go out of business. One was the store in the Carillon Arcade in the Perth CBD, and I believe the other was inside the Carousel shopping centre. I have very personal reasons for this, but I also had the distinct impression that corporate wanted the owner to move on also.

Reply
1. Landuchi
  
  November 23, 2011 at 4:56 am
  
  LOL. Are you the state manager of Eb in WA?. I remember as a customer of both carillon city store and carousel the state manager of EB used to hate these two stores and would personally go out of his way to bag these guys, so much so that he once told me that these two stores sell fake copies of every game, hence they are cheap. Sorry if you are not dude, but these two stores were a the best stores in WA as far as I’m concerned and sad to see them close down. I used to gettall the collectibles and unique stuff from them including rare nintendo stuff. nintendo are duchebags for not supporting Gametraders.
  
  Reply
2. sandra
  
  November 23, 2011 at 1:35 pm
  
  carousel and carillon were epic stores. The owner there was awesome. The guy went out of his way to make the stores evolve, only to be shut down by his head office. I remember some guy from head office -i presume the same guy on this forum from game traders always called up the store to give him a hard time when the owner was just trying to make some money and survive. i wish more stores like this would be open. i hate going to eb, jb and game. there is no customer service there. the stores look bland – there is no culture. gt carousel and carillon – i miss you guys and so do a lot of my friends- you guys rocked!
  
  Reply
fishburgr

November 22, 2011 at 4:09 pm

I never realised that Gametraders was an Aussie company, mainly because I generally don’t go there, I get my games from EB instead.
But now that I know this and seeing the nonsense that they are being forced to put up with just to try and stay competitive I will from now on get all my games from Gametraders.
Just the fact that the boss of the company takes time to come here and answer a few questions says to me that its the sort of company that I would prefer to see prosper.

Reply
tommy1

November 22, 2011 at 4:31 pm

So what is the difference with EB Games getting exclusive collectors editions that no other retailers sell?
I think the Skyward Sword Collectors is at EB/Game/JB but there are heaps of editions that ONLY EB gets. Gears of War 3 comes to mind straight away

Reply
1. Inside
  
  November 22, 2011 at 4:44 pm
  
  ? Unsure of your exact meaning… Basically, larger stores do deals with the distributors for exclusivity for Limited/Special Editions. So either the distributor never puts it on their site for purchase or it disappears and is “no longer available”.
  
  Reply
  1. Leigh
    
    November 22, 2011 at 4:59 pm
    
    Ironic that Kotaku’s first article on this (for this week) was explicitly about EB Games, not Gametraders or Nintendo and whatever ‘wrong-doing’ those two were up to.
    
    Not being a troll or snarky, but it’s heartening to see other specialist retailers being transparent as they have been lately – Gametraders this week, GAME and JB in the last few months.
    
    Reply
djmcbell

November 22, 2011 at 6:49 pm

It seems to me that the odds are distinctly stacked against GameTraders.

Nintendo won’t deal with them on occasion (Mario 3DS and Skyward Sword being two such occasions) due to Nintendo basically wanting to deal only with the big companies (now THAT’S supporting the local economy for you!).

The various distributors, for whatever reason, refuse to work well with them, again such as the LE of Skyward Sword. Presumably because they only want to stock it to companies ordering X number of units, which GT can’t do because they’re not big enough. Again, way to go supporting the local economy guys!

Other retailers, mainly large department stores, are able to heavily discount and in fact use these games as a loss leader to get you into the store. GT doesn’t have the money to do that because they’re smaller, specialise in games (unlike Big W who do pretty much everything, for instance) and can’t get the same deals these guys do.

So the only advantage left is grey importing – something that is perfectly legal in Australia. They get the game early. They can possibly even get a better profit on it. And let’s not forget, they get this kind of coverage – any publicity is good publicity, remember.

It seems to me that the Australian games retailing sector is set up to penalise smaller retailers and doesn’t really make much sense. Nintendo doesn’t seem to want to know either. What do people expect GameTraders to do? They’re stuck between a rock and a hard place.

Reply
TheMonkey

November 22, 2011 at 9:12 pm

I used to work in the gaming industry for one major retailer. The real issue is the size of the territory in Aus in relation to the rest of the world. We as Aussies are paying the highest wholesale price for games and therefore higher retail costs.

The publishers will continue to charge distributors the higher costs until more retailers like Gametraders start to circumvent this unfair wholesale pricing system. The UK pay a fraction of the price for wholesale games compared to Aus distributors due to the size of the market.

We need to start to put pressure on publishers to make games a universal wholesale price. This will help prevent bigger retailers gaining monopolies on collectors or limited editions and squeezing out smaller operators.

Reply
gamer@heart

November 22, 2011 at 9:38 pm

Its a real david vs. goliath battle here.. I think an important point was made above that Gametraders is an Aussie franchised retailer, not many people realise that. Go in and have a chat to your local Franchisee(s) i guarantee they will be there almost every day of the week trying to make their business work and pay the bills like most of us. I love GT stores as they take me back to a time when i was in an independent store some 10 years ago.. that’s where i want to spend my money.

Reply
1. Robert
  
  November 23, 2011 at 1:13 pm
  
  Hi Gamer@Heart…
  
  You are sooo correct. I’m a Gametraders Franchisee at Macarthur Square, I’m currently working 6 days a week plus my 7th is catching up on paper work! I do this by choice, and the fact that it’s coming into Xmas time.
  
  I do it cause I love retail. I converted from the old defunct Ezydvd franchise in the middle of last year. I chose to change to Gametraders as the MD, Mark, and team as very proactive on trying to stay ahead of the market direction and introducing diversification into the business. Whilst yes we do mainly rely on games for our sales our secondary lines of toys, figurines, plushies, trading cards, retro gaming put us on a different level to any other retailer around.
  
  It’s been great to hear that people are realising that Gametraders is an Australian owned franchise system and that there are local store business owners who live in their local community. Our profits etc get spent locally (oh, and on our own mortgages) rather than heading overseas to parent companies.
  
  Cheers
  Robert
  
  Reply
the_shag_king

November 22, 2011 at 11:20 pm

What you have to sk yourself is why companies like Nintendo and other Vendors as Mark said don’t want to deal with Gametraders??? There is always a reason, sometimes even the smallest of growing companies can catch a break. As I understand it, they used to deal with Nintendo of Australia in the past, but due to other circumstances they had a falling out.

Gametraders are “grey importing” for sure. Not just Nintendo products, but many more items for every other system. They make like they are trying to be competitive but they are actually making VERY good dollars selling the overseas product.

If Gametraders really cared about being an Australian owened company, something they always seem to pride themselves on and something Mark is always saying, then buy your products from Australia and support the local games market.

Mark, you can’t complain and claim to be an Australian company and play the disadvantaged card every other week, buy Australian products get rid of the imports and do the right thing.

The overall issue beyond this is we pay too much at retail for games. There is one person who is making the money and that is the Vendor. They are making huge margins from countries such as Australia and taking advantage. I understand the economics and the fact that other countries don’t have comparable wages etc. If the Aust top line prie point was $79.95 with a nice margin for the vendors and the retailers, things might be a bit better for everyone.

I think that the only person that is destroying the local market is the company and MD that is on these very forums complining about not getting a better deal. Maybe it is time to back yourself Mark and take a leap of faith and go big time. Put your money where your mouth is!!!

Reply
1. Inside
  
  November 23, 2011 at 9:35 am
  
  They may make good money? What would you define as good money? In Australia, if you sell a game at RRP of $109.95- the retailer usually pays $89.95. So $20 per game- BUT to be competitive, you cannot sell for $109.95- and when major retailers are down the road selling the game for $79.95- it is extremely disheartening. Not to mention you need to pay shop rent, wages etc. Say, $20 per hour per staff member? So, you need to sell at least 8 games at full price to cover one staff member.
  
  So to survive, GT are importing. People really have no idea how hard this industry is on everyone- mainly smaller businesses. Of course they are branching out and diversifying- there is little to no margin in games. How many independent (not your JB, EB, or even GTs) video game retailers have you seen around? I do not see any. Why do you think this is? If it was such a great market, every man and his dog would be setting up shop.
  
  Reply
robby

November 23, 2011 at 12:11 am

Gametraders is finished, how many stores they down to now? It’s a shame because they used to be the go to guys for new and retro but now that they’re trying to be like EB and Shin Tokyo selling toys and clothes (look at their Marion shop, you’d be lucky to find 2 games to rub together). It just all reeks of a failing business slowly sinking trying desperately to come up with a new crazy scheme to keep from falling under. Bad management from from the head honcho for sure, seriously dude what kind of CEO responds to random comments on a blog? Insecurities much…

Reply
1. lol
  
  November 23, 2011 at 2:02 pm
  
  You got $400, 000 o set up your own GT Franchise? if so you should open one, you seem to think you know alot about it.
  
  Reply
Ninjadead

November 23, 2011 at 12:50 am

Nintendo isn’t doing anything wrong, that’s all I’m going to say.

Reply
Snoopy

November 23, 2011 at 1:53 am

I would like to thank the_shag_king for the most sensible post I’ve read on this site in the last couple of days.

Reply
NotAbbott

November 23, 2011 at 9:06 am

I’ve mentioned this before, but some specialist retailers occasionally import their games direct from their UK or US arms, as it much MUCH cheaper (close to $20 per title) than buying them from the Aussie distributors.

That is not all that different at all to what Gametraders has done here, so really is a storm in a teacup.

Having said that, I do feel for GT in this instance having been put in an unfair and untenable position by DodgyBros/Nintendo.

Reply
Deadninja

November 23, 2011 at 1:53 pm

Find this article interesting. I am surprised Gametraders cannot get a deal with nintendo. One of their staff in the head office is an ex nintendo rep i’m sure. Wonder why he cannot pull the deal for them. The other staff they have is an ex EB manager or something. Also they have an ex AID staff there who does all their buying. I reckon they should fire the staff and get some new blood in who have balls to stand up against nintendo and get a deal locally not internationally where anyone and his dog can buy. Just go to OZgameshop.com and you will be able to get all your collectors editions. I had Zelda Skyward since the last 2 weeks from a UK mob. The MD of gametraders here is trying to show some balls, but unfortunately it is a sad case of sympathy vote from consumers- he did this previously with Zelda on 3DS release aswell. Idiots at the helm here , stores doing all the work = disaster.

Reply
Kid Handsome

November 23, 2011 at 3:11 pm

Having previously worked at Gametraders and another independant gaming store, it’s easy to see why company’s import from overseas distributers. A full priced game through a local distributer may only have $10 or $20 profit in it, whereas an overseas copy could easily double that. It seems to be that it’s evening out the playing-field, especially as independant stores such as GT don’t receive the same treatment from local distributers that larger retailers may be getting.

Reply
djmcbell

November 23, 2011 at 6:41 pm

The only reason these stories are getting attention is because GameTraders are using their grey imports to sell product before the release date.

Not that there’s anything legally wrong with that – it’s not the same product. The import version of Mario 3DS has no Australian release date, which is what they’re using.

If games were released within the same week in the English-speaking markets (America gets it on a Tuesday, Australia Thurs/Fri, UK Fri etc) then there wouldn’t be this problem. Sure, GameTraders would probably still import, but only because it seems it’d be cheaper for them to do so.

Of course if this did happen and GameTraders lost the ability to release early in this manner, then they’d lose one of the few trump cards they have at the moment.

Deadninja said that this is more of a “sympathy vote” – to me it seems GameTraders is using an interesting loophole to do good business. Nintendo won’t deal with them – they’ve got nothing to lose by using grey imports and everything to gain.

Reply

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