Wednesday, January 12, 2011

Thought: 3DS region locking locking Nintendo out of online competitiveness?

It appears that the 3DS will be region locked. This in itself is probably not too surprising, given Nintendo’s history, but given the 3DS will be involved in a tight battle for the growing online market, I fear it was a poor decision.

For various reasons (read here for a good overview) region locking does benefit the games distribution chain. By forcing consumers to buy locally, publishers can properly determine the demographics and market for their various games. Retailers benefit for obvious reasons, and generally speaking local branches of games companies get to keep their jobs.

But from a consumer standpoint, region-locking is not friendly. It limits choice and allows a degree of price inflation (after all, there’s less competition if people can’t buy from overseas).

The problem for Nintendo is that its two chief handheld rivals both work in an environment that is essentially region-free. The PSP (and one would assume PSP2) are region-free, and Apple’s App store, while region locked, sees virtually all games released globally, as it enjoys relatively relaxed licensing environment.

Not so with Nintendo’s consoles. The DS and Wii both have markedly different selections on games, depending on whether you’re in Australia, Japan, Europe or the US, and you’ve got no way of accessing games from other regions.

Ultimately, I think this is going to hurt Nintendo’s chances on competing in the online space. The range of games available in any given region is going to be less than a PSN or App Store, where you can access virtually anything (admittedly some content will be harder to access than others, but it will be accessible).

Nintendo will also be relying on 3rd party developers and publishers who could just as easily release on an App Store or PSN and gain greater exposure, more easily than navigating through Nintendo’s licensing rules and regulations.

The 3DS will be almost certainly be a great console, but I fear that despite promises that Nintendo is reforming its approach to online, decisions such as region locking are again going to relegate it to third place in consideration amongst publishers and developers when it comes to its online shop portal.

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