Nintendo will be ending its console and game distribution in Brazil due to high import tariffs imposed by the Brazilian government.
The changes will take effect by the end of the month. Despite the changes, Juegos de Video Latinoamérica, the company's distributor in Brazil, will continue distributing Nintendo products in other parts of Latin America.
"Brazil is an important market for Nintendo and home to many passionate fans," said Nintendo of America Latin America general manager Bill van Zyll in a statement. "But unfortunately, challenges in the local business environment have made our current distribution model unsustainable in the country. These challenges include high import duties that apply to our sector and our decision not to have a local manufacturing operation. We will continue to monitor the evolution of the business environment and evaluate how best to serve our Brazilian fans in the future."
Fortunately, the game developer will not be ending all ties in Brazil. In the statement, the company did say that it would continue to monitor the business environment and evaluate ways that it can serve fans in Brazil in the future.
High tariffs in Brazil have had heavy impacts on gamers in the country before. When Sony launched the PlayStation 4 console in Brazil, which costs $400 in the U.S., the price tag was a whopping $1,845 USD. Sony released a statement to fans saying that it was not trying to take money from them, but had to raise prices due to fees and tariffs imposed by the Brazilian government. Over 60 percent of the $1,845 went to the Brazilian government.
In early 2013, however, Sony got around many of those tariffs by investing in a plant based in Brazil to build its PlayStation 3. Apple did the same thing in 2011 to continue selling its products in Brazil.
It's important to remember that these new rules won't mean that gamers in Brazil won't be able to buy Nintendo games or consoles at all. It will mean, however, that gamers will have to purchase games from private importers or import them themselves. This is likely to be much more expensive, but it is possible.
The high prices in gaming have forced gamers in Brazil to lean more toward free-to-play PC games. More than one-third of Brazil's gaming population, or 17 million of the 51.5 million gamers in the country, regularly play free-to-play games such as League of Legends and Team Fortress 2. Players spent roughly $420 million during one year in transactions in these games.
It is likely that the popularity of free-to-play games in Brazil is another reason that Nintendo pulled out of the country rather than investing in local plants as Sony and Apple did.