Citing High Tariffs, Nintendo Pulls Out of Brazilian Games Market

In a statement yesterday, Nintendo of America announced that the company will be completely pulling itself out of the Brazilian market due to “high import duties that apply to our sector.” Speaking with UOL JOGOS, Bill van Zyll, GM of Latin America at Nintendo of America, called the move “temporary,” but did not know when or how the console manufacturer would return to Brazil.

Nintendo said that even though it will stop shipping its goods into Brazil, it remains committed to the country.

“Brazil is an important market for Nintendo and home to many passionate fans, but unfortunately, challenges in the local business environment have made our current distribution model in the country unsustainable. 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.”

As well, banking regulations in the country prevent certain credits cards to be used, effectively crippling Nintendo’s digital market and even prevents Brazilian players to download free content.

It’s not the first time console manufacturers have had trouble with Brazil’s high import tariffs. Sony, who imports its PlayStation 4 into the country, sells its console at 3,999 Brazilian reals, which was about 1,852 USD at the time but has dropped to 1,490 USD today. Microsoft chose to avoid the tariffs by manufacturing the Xbox One domestically rather than importing it, a costly decision, but one that results in its ability to sell the console for just 2,199 reals, or 819 USD.

Due to the extremely high costs associated with consoles and games, Brazil’s games market has always been plagued with piracy, making it hard for developers to turn a profit even if they do manage to ship their games in the country.