Nintendo's Refurbished DS, 3DS Sales Risky Move

Nintendo has recently started selling refurbished DSi XL and 3DS units on its website. This might seem like an insignificant change, but the pricing scheme in place disrupts a cardinal rule of direct to consumer sales.

In the days before the Internet, there were hard and fast understandings between manufacturers and retailers. Chief among them was, "do not undercut retailers." Mail order was no substitute for shelf space, because it was the primary way to get products in front of consumers. It was acceptable to sell directly to consumers, but the prices had to remain equal or higher in order to preserve relationships.

Things have changed. Manufacturers are able to communicate directly with customers, and many have their own online stores. People have become more accustomed to waiting a few days for goods, and immediacy is no longer a key selling feature. Still, the old arrangements are in place. It's rare to see retailers pushed around on pricing by direct competition from the supplier.

As of writing, Nintendo is charging $99.99 for a standalone refurbished DSi XL costs and $129.99 for a refurbished 3DS (each with a one year warranty). Best Buy, who also sells used units is currently priced at $10 less on both fronts. GameStop (Disclosure: Game Informer is owned by GameStop) is currently asking $109.99 for used DSi units and $159.99 for used 3DS consoles (with similar refurbishing).

Whether Nintendo is purposely trying to disrupt its relationship with GameStop is unclear. However, it would not be the first time the manufacturer was at odds with a retailer. Kotaku has previously followed the strange tale of Nintendo's relationship with Amazon, which has deteriorated to the point where the online retailer does not sell Wii U and other hardware. Burning a bridge with other retailers when sales are down is counterproductive to Nintendo's recovery.

Retail is still important for getting in front of the more casual consumer. Sony stated earlier this year that it still anticipates relying on brick and mortar. Whether Microsoft will lean as heavily on traditional retail, or lock out used games, is unknown but we expect to have more information on May 21 when the next Xbox is revealed.

Also, it looks like Amazon.com DOES sell the Wii U, unless this page is a fake: http://www.amazon.com/Nintendo-Wii-Console-8GB-Basic-U/dp/B0050SVHZO
I like how the "source" at the bottom is "Nintendo via Joystiq" and ZERO effort was made using Google and checking Microsoft's online store, Sony's online store, or Amazon.com.

As much as I love GameStop, if I were to buy a console used, I would want it from the manufacturer especially if they're giving a 1-year warranty on the item. Plus, more hardware sales equals more software sales which is good for everyone in the industry including the customers.

I understand... it's somewhat scary to consider the possibilities of brick & mortar disappearing. I'm sad that I have to drive miles and miles to find a hobby store since they can't compete with the prices online. The beauty of brick & mortar is developing a relationship with the people that work there (actual human interaction) and to actually physically see the item that you're buying (yes... you can call me old-fashioned).

But on this front, I have to say that it's great that the manufacturers are getting in on the used console market, especially if they can certify them. Just as we believe that video games should mimic other business practices such as used game sales, so too should manufacturers be able to sell their products certified used.

Additional competition means only positive benefits for the consumer. And maybe if the publishers can better understand the used console community, then they could chill out on the used games side as well. I see this as a win-win situation with only places like GameStop seeing the negative in this (lower the price!... this is capitalism at its best).

I guess I missed the point of the article. Based on most of the comments the article says that Nintendo is evil, or that GameStop wrote the article to punish Nintendo. Looking at it from a business standpoint, it sounds to me like the question is being brought up whether or not this will be a good market strategy for Nintendo. I think maybe the conspiracy theories could be toned down a little bit.

This is a pretty pathetic article. No mention of the fact that GameStop gouges players with their practices, and that we complain LOUDLY about it (as mentioned by other, real business and technology journalists on the internet).

It's borderline criminal that GS charges ten bucks less than MSRP for a busted up, barely working 3DS. Even worse that they don't offer any kind of discount for used games that have no case or instructions. How is that any kind of value to me? Nintendo wants to give me some value by undercutting GS? GS wants to retaliate? I'll go get my stuff at Target or Wal-Mart. I'm sure they wouldn't mind setting up a used games section.

And don't give me this, "B-b-b-b-but our relationship with GS does not affect my reporting." What a load of horse hockey.

Please tell me how Nintendo could not undercut the price when Gamestop only sells a used 3DS for 10 bucks less then a new one? Thats almost criminal. I never shop at Gamestop, and this is exactly why. Their business practices are unethical and as someone that works in Supply Chain I refuse to buy from companies like that. This article irritates me.

Hmmm....the "news" tag was changed to "editorial." While I applaud such a clarification, the question remains, why wasn't it labeled as such to begin with, and why DO so many opinion and editorial pieces on this site carry the "news" tag?
Furthermore, I applaud the GIO community for properly exposing the myriad faults, flaws, fallacies, and straight-up factual errors of this recent piece of anti-Nintendo rhetoric posing as objective news on Game Informer Online.
It is fitting that in the community blogs there are two focused upon, to quote them, "The Sad State of Gaming Journalism."

I never buy refurbished electronics. Why? Because they're previously owned and BROKEN electronics that have simply been fixed and are being re-sold. Who's to say the problem that afflicted the product won't pop up again? Finding reburbed items with a warranty (like these have) helps, but hell nah I'd still prefer brand-new over something that only God knows how old it is, where it's been and what broke in it.

Well the last time I bought a "refurbished" Dsi from GameStop, half of the touchscreen didn't work. Yes it was me NOT to buy the warranty but still, I had paid $80 for it and if I were to return it now I would only get $20 maximum.

Get it together, Nintendo. I don't hate Gamestop, and you guys really shouldn't either. Some people want an immediate copy, or can't shop online. Sure, their return policy kinda sucks, but at least their used games are pretty cheap compared to places like Walmart.

So... let me get this straight, GameStop is going to attempt to call out Nintendo on business ethics? Really? The company that opens brand new games (which by that companies definition is now used) and sells them at full retail, is going to complain about Nintendo selling their own console? Irony doesn't quite describe what's happening here. There is no cardinal rule in business, there is no such thing as "do not undercut retailers." Someone should really cut out the BS, a good start would be deleting this crap editorial, then maybe offering better, and more competitive pricing and trade in values. Also, good job on pointing people away from GameStop for DSi XLs and 3DS's, since they can save a pretty good chunk of money by going elsewhere. Good Job!
Oh and you can get Nintendo hardware and software on amazon.com right now.

I really wanted a 3ds for a few games like fire emblem and monster hunter 3 , so it didn't make sense to plop out 200 for a 3ds xl. I just got my refurb aqua blue 3ds from Nintendo today and it is pristine. I got everything a new unit gets and a 1 year warranty, but for all the people wondering, I got no registration card so I will not get to register this console for points, only games will count for me. I checked the screen with a cree led flashlight and found nothing, heck even the shell has no scratches on it. Spread the word and buy these quick before the first batch is commented on everywhere and people buy these up.

Maybe I got really lucky or maybe a lot of the 3ds refurbs are really just open box returned units that have been inspected again.....