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Iwata Is Wrong When He Claims Digital Games Aren’t Cheaper Because of Value

Nintendo Money

GameSpot posted a piece today where Nintendo President Satoru Iwata talked about why digital titles on the eShop are not cheaper than their boxed retail counterparts. And as with most things Mr. Iwata says these days, it’s nonsensical. His comments come from an investor’s Q&A session.

“Although the mainstream idea regarding the digital business in the industry before we actually started selling software in both digital and packaged formats last year was that the digital version should or must be priced lower than its packaged counterpart, we decided that, since the contents are the same, the company would offer the software at the same price, be it the packaged version or the digital version.”

This is probably the same reasoning Sony and Microsoft would use for reasons digital titles on the PlayStation Network or the Xbox Live Marketplace aren’t cheaper than the boxed versions either.

As a “Deluxe” Wii U owner since launch day let me just say that I’m never going to buy anything off of the eShop. For one, I’d have to buy an external hard drive just to be able to download more than a couple of games (32GB of space on a console is a joke). Secondly, I wouldn’t want to jump through the hoops and deal with Nintendo’s support to try and get back purchased games if something were to happen to my Wii U… because Nintendo foolishly ties content to a system instead of an account. And finally, if I’m going to have to pay the same price then I’m going to go boxed and actually own my game and reserve the right to sell it, lend it, or trade it.

Anyway, Iwata goes on to say…

“This is because we want consumers to value software as highly as possible and because we have been trying to heighten the value of our software whenever we produce it.”

No, Mr. Iwata that is completely ridiculous. The digital version isn’t as valuable as the boxed version. I can trade in a boxed version, or sell it, or let a friend borrow it. I can display it on a shelf and read the box. I can collect the boxed version, and depending on the title it could potentially become a collectible and be worth something in the future. Heck, I can sling the disc around like a frisbee if I choose too. The boxed version is more valuable simply because it has value. You’re not heightening the value of the digital title by making it the same as the packaged product because you’re ignoring what it is that makes the packaged version valuable in the first place outside of the “content.”

This isn’t anything new with Nintendo of course, or consoles in general. They’re so desperate to want you to see value in their product that they have no problem overcharging people. Is there a reason why SNES games are $8 on the Virtual Console? I mean, on any given weekend I could hit up one of several flea markets and find many of the same NES/SNES titles for anywhere from 0.50 to $2.50. Sony isn’t immune either; they overcharge for PS1 classics as well.

Digital games should be cheaper. There are no discs to be manufactured and written to, or be shipped out in plastic cases to retail stores. This of course saves money, and the smart business thing is to pass on the savings to your consumers. That’s not the way console makers want to do things though. Beyond that cheaper aspect of it of course, again a boxed version can be sold, traded, lent, or given away. If I buy digital, I can’t sell it back or give it to a friend. I’m stuck with it.

If I were to go to Steam right now, I could get NBA 2K14, a game which just released a month ago, for $29.99. If I were to log on to the PS Store or XBLM, I could buy the digital version for $59.99… which by the way is $10 more than the PS3/360 boxed versions are currently selling for on Amazon. Steam, and PC markets in general, get it. It’s no surprise then that Steam is as popular as it is and does digital right, even though it is DRM. And yes, Steam’s prices for newly released titles are the generally the same as the packaged product too. In general though, Steam greatly appeals to consumers and impulse buyers by frequently having amazing sales.

As I type this, I’m on the Wii U’s eShop. Let’s examine Nintendo’s idea of “value” by looking at some of their digital games.

ZombiU was a launch title for Wii U a year ago. I can buy the boxed version, through third party sellers but fulfilled by Amazon (so it’s covered by my Prime account), for under $25 new. It is $59.99 on the eShop. Now sure, it still retails at $59.99 on sites like Best Buy, Wal-Mart, and GameStop. Why is a year old title still retailing for $59.99 in stores? More importantly, why is it still $59.99 in your eShop?

Scribblenauts Unlimited is another launch title that is still on the eShop for $59.99. Meanwhile, new boxed copies of this game can currently be purchased on GameStop for $29.99. It’s $29.96 for a new boxed copy from Amazon. Of course you can get the PC version (boxed!), from Amazon, for $10. It’s $19.99 on Steam. Hell, you can go to Humble Bundle over the next 12 days and spend more than the average (currently $4.63) for WB games and get it for free.

So Nintendo, where is the value in that? Why is the digital version of a one-year old launch title, that recently had a new entry in the series, $30 more than boxed copies in stores? In what way are you not knowingly ripping off whoever navigates your mess of a digital store and makes the boneheaded decision to buy Scribblenauts Unlimited digitally for $60?

It’s not just ZombiU and Scribblenauts Unlimited though:

* Amazon/GameStop prices listed are for new copies sold by Amazon/GameStop, not third party sellers.

  • New Super Mario Bros. U (Launch title) – [eShop: $59.99 l Amazon: $44.99]
  • Ninja Gaiden 3: Razor’s Edge (Launch title) – [eShop: $59.99 l Amazon: $49.87]
  • NBA 2K13 (Launch title) – [eShop: $39.99 l Amazon: $29.99]
  • Madden NFL 13 (Launch title) – [eShop: $59.99 l GameStop: $29.99]
  • Tekken Tag Tournament 2 (Launch title) – [eShop: $54.99 l Amazon: $14.99]
  • Darksiders 2 (Launch title) – [eShop: $59.99 l GameStop: $59.99]
  • Batman: Arkham City Armored Edition (Launch title) – [eShop: $59.99 l Amazon: $19.02]
  • Need For Speed Most Wanted U (Launch title) – [eShop: $59.99 l GameStop: $29.99]
  • Rayman Legends – [eShop: $59.99 l Amazon: $49.99]
  • Splinter Cell: Blacklist – [eShop: $59.99 l Amazon: $52.37]

Those are just some examples, but you get the idea. In practically every case, Nintendo’s eShop is higher than the retail outlets.

So, Mr. Iwata, Nintendo, where are you at on the value of these digital titles since the “contents are the same?” Why such large discrepancies in several of these cases from games that were Wii U launch titles? Is anyone seriously supposed to be enticed to buy Arkham City digitally on Wii U for $60 when they can purchase a new boxed copy from Amazon for under $20? Do you not see the “value” in lowering your digital prices? If you’re going to say “since the contents are the same, the company would offer the software at the same price, be it the packaged version or the digital version,” then why not at least lower the digital prices when the packaged prices drop?

Price the newly released games at $59.99 all you want, although I would say a good business move would be to price the digital version a little cheaper even if you only knock $5 off, as that isn’t doing anything that everyone else isn’t already doing (of course that doesn’t make it right). But don’t preach “seeing the value” and all this nonsense when you have year old games still on your digital store for $60 when the packaged versions are at least half that in most cases these days.

And yes, I know it isn’t just Nintendo. Sony and Microsoft do the same thing with their online stores, and new releases on Steam are almost always the same as a packaged product. Those guys aren’t running around preaching “value” as the reason digital prices are usually the same as boxed prices though. However, at least Sony, Microsoft, and Steam do lower their prices and have sales.

Need for Speed Most Wanted is again $59.99 on the eShop, but it’s $29.99 on PSN, $39.99 on XBLM, $19.99 on Origin, and $19.99 on Amazon digital download. This is a year old game, and yet the eShop is $20 more expensive than the next highest priced digital version, and $40 higher than the PC download that’s going to look better.

That’s a problem, Nintendo. You can say, “we have already found that once consumers have made a digital download purchase, many of them tend to make another one,” and that’s probably true, but I would say they would tend to buy even more of them if you gave the consumers an incentive to by lowering your prices when your competitors do at the very least. As is, if I were looking to buy the one-year-old title today, Nintendo’s eShop wouldn’t even be a consideration since the game is much cheaper, either digital on every other system, or even boxed on Wii U.

Iwata, you say some crazy things, but in light of eShop prices on even launch titles to this day, I think “we want consumers to value software as highly as possible,” is the dumbest thing that you’ve said recently. Yes, consumers, value the overpriced old games on the eShop… pay inexplicably higher prices for a product that you won’t own and won’t have when your system dies.

I don’t know about the rest of you, but I just don’t see the value in that. As such, I’ll continue to not spend a dime in the eShop.

I can think of a number of reasons why eShop prices are as they are, but value isn’t one of them.

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About Gary Smith (995 Articles)
I'm Gary Smith, aka "PatriotPaine." I'm the Editor-in-Chief of VortexEffect.net. I'm usually posting news and reviews, and doing all the back end stuff as well. I like to play games, watch movies, wrestling, and college football (Roll Tide Roll).

19 Comments on Iwata Is Wrong When He Claims Digital Games Aren’t Cheaper Because of Value

  1. Good article. I don’t have a Wii U, but I do have a 3DS. Given Nintendo’s archaic policies and poor online infrastructure, it is a cold day in hell when I decide to give them money for a digital purchase.

    Additionally, most Nintendo games of in worth hold their value extremely well. I have purchased 3DS games on eBay, played them for a month, and then managed to resell them for more than I initially paid (which was already far cheaper than used from Gamestop, new, or than its eshop price).

    The one lone exception I have made is Pokemon XY. I decided that it is a game I will never resell, and I didn’t feel like lining up to get a copy. Since I am primarily a Steam user, I only rarely go to physical stores for game purchases. I prefer purchasing online where I can get a far better deal.

    I am with you. Digital gaming should be cheaper, across the console board. Or at the very least, the prices need to reflect the trends in the physical equivalent’s value. I don’t know about you, but I don’t mind paying for value, as long as I don’t feel like I am getting screwed over. I’d much rather pay Nintendo directly for a fairly discounted digital download of a game I want (but wouldn’t pay brand new for, especially months after release) than support used game markets via Gamestop or eBay.

    Like

    • Definitely, and that’s all I’m asking for really. I can understand why they have digital prices the same as retail prices at launch, but it’s a ripoff when you don’t lower the price down over time. I don’t know what Nintendo’s problem is, but really everything they’ve done (at least with the Wii U, I don’t have a 3DS) basically screams “buy physical.”

      Steam understands digital prices. Sony has come around to it more. Work with the publishers, and get the gamers some great sales and price drops over time. Simple no reason for Nintendo to have/allow digital titles like Scribblenauts and Most Wanted U to be priced at $60 in the eShop one year later.

      Like

      • If anything, digital pricing should be your public option for controlling the market cost of the game over time. There always be a leaning toward physical products, especially at similar prices, but, as I mentioned before, you can really put a dent in the used game reselling markets if you just price digital titles competitively and fairly.

        Like

        • Agreed completely. Cheaper digital titles simply make too much sense. For new titles, I can understand maybe these guys don’t want to upset retailers by undercutting them, but once the retail price drop the digital price should plummet.

          Like

          • I was pissed off today when Kid Icarus: Uprising finally came to the 3DS eshop. $35 dollars! That’s five dollars cheaper than Gamestop new, ten dollars more than Gamestop used, and probably about fifteen dollars more if I watched ebay like a hawk.

            And still without any resell or lending value to it. UGH

            Like

  2. It’s shocking that people download games at any price. Nothing beats having games on disc or card. But looking on Xbox Live and PSN, games can cost up to £50 each. For the same price, I’d much prefer to have them on disc. But in most cases, games are cheaper on disc (sometimes a lot cheaper), not forgetting the lower cost of used games. The only way I can say it is people who download games at any price must have money to burn. No way would I pay up to £50 for fresh air. Once gaming goes digital only, there will be a decline. By then, game prices will have gone up. It may take off from the start, then people will realise it’s just not worth it. Not being able to buy used games and swap games would be crap. As for Nintendo, Iwata needs to move on.

    Like

    • I buy physical 95% of the time, for the same reasons described here. It’s cheaper. I don’t even buy used… I can usually find a new copy cheaper on Amazon than GameStop or Best Buy has for a used one. I have digital PS3 games thanks to PS+ (which for only $50 is an absolutely amazing service), and have bought some digital games thanks to some great sales (especially for Plus members).

      And I agree, definitely time for Iwata to move on (and I like/respect him, but he’s just getting more and more out of touch with the times).

      Thanks for the comment!

      Like

  3. Great article, I agree 100%. What I can’t seem to figure out is that Nintendo has had sales in their eshop, but only on digital only games. I picked up Trine 2 for $7.99, marked down from $19.99. Why are their retail games on the eshop frozen at high prices?

    Like

    • Thanks!

      I wonder that same thing myself. It makes sense to have Trine 2 on sale now, but I have no idea what they’re thinking with the pricing of the digital retail games. It doesn’t make sense. They’re completely clueless when it comes to anything relating to online it seems.

      Like

  4. This is the kind of thing I see from Nintendo that is in the same out of touch vein that reaches all the way back to “let’s stick with cartridges” while everyone else was going to optical format back when the N64 was launched. I just don’t get them sometimes.

    Like

    • Agreed. Sad thing is, Wii U is a great system with a ton of potential. It could be so much more, even though it is under powered compared to PS4/X1. If they would just put forth and effort they might would have something. As is, even with the Digital Deluxe Promotion, I have zero reason or desire to ever purchase anything off of the eShop. That includes overpriced NES/SNES games.

      Like

  5. It’s crazy for a company that is pushing so hard to go digital is so out of touch with how digital should work. Any store will tell you that Nintendo doesn’t provide hardly any copies of new release games above pre-orders anymore on day one. They want you to go digital. Which day one isn’t as bad but then you still have the issue of space that you touched on already. Wii U’s 32 GB “Deluxe Edition” hard drive looks hilarious compared to the 500 GB hard drives that Microsoft and Sony are offering.

    Like

    • Yep, well they can forget me buying anything digital from them. If they would give a reason to do so, like cheaper prices, I might would consider it. But I’m not going to buy an external hard drive just so I can over pay to play Wii U games. They’ve really taken a horrible approach.

      Like

  6. If it wasn’t for finding a niche audience with Wii, I think either Bill Gates or the folks over at Sony would have long ago added the entire Nintendo brand/catalog to their list of liquidated assets. With this level of disconnect from reality, they might still at that sooner rather than later.

    Good stuff Stinger.

    Like

    • Thanks Jules.

      If it came down to it, Nintendo would just drop out of the console race and simply become a developer for all platforms like SEGA did.

      Of course I don’t want to see that happen. I like Nintendo.

      Like

  7. As usual Nintendo is exploiting their kiddie & sucker mom audience who doesn’t know crap.

    This is why they can never regain the informed hardcore gamer ever.

    Like

    • I agree with the first part.

      I think they could regain hardcore gamers if they changed their approach. That wouldn’t happen with Wii U, but if they can make it to another console down the road then they have a chance.

      Like

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