Nintendo's decision to sell all 3DS games in both retail and digital forms simultaneously may have sounded like a bad deal for retailers, but Satoru Iwata reasons otherwise.
According to the Nintendo boss, retailers will have an easier time satisfying demand without ordering surplus stock thanks to the availability of digital versions of games, thus increasing profitability.
"One of the challenges in the video game distribution industry in Japan is the higher inventory risk; it is a bigger challenge than ever before. Since it is common practice in this industry that retailers take the inventory risk, their profits from good sales can be easily wiped out by surplus stock," said Iwata during a recent shareholders meeting.
"When you visit a store for a game only to hear from the clerk that it is now out of stock and the next shipment will not be until three weeks later, you will be discouraged to buy it. The demand sometimes does not lead to actual sales, like in the case I just mentioned. The reason we will start the digital download sales is that decreasing the inventory risk will be of great benefit to the video game business," he added.
Nintendo - and major digital outlets such as Steam and Xbox Live - are usually highly secretive of sales figures, but Iwata says Nintendo will share the download numbers for New Super Mario Bros. 2 (the first retail 3DS game to be released as a digital download). This, explained, is "so that those in this industry can make the next move after finding out the consumer behavior toward download versions."
He went on: "When they know the size of the digital distribution market, they might be inclined to accept a certain inventory risk to try the download sales with special features."