Nintendo will no longer distribute its games or consoles in Brazil because of the Latin American nation’s high import taxes.
Bill van Zyll, Nintendo of America’s Director and General Manager, Latin America:
“Unfortunately challenges in [Brazil’s] business environment have made our current distribution model in the country unsustainable… We will monitor the evolution of our business environment and evaluate the best way to serve our Brazilian fans in the future.”
Imported games and gaming systems are more expensive in Brazil. For example, Nintendo’s Super Smash Bros. retails for $74 in Brazil and only $60 in the United States — a 20% difference.
Not only does Brazil have high tariffs, its tax system is also notoriously complex, costing companies time and money. It takes approximately 2,600 hours to prepare and pay corporate taxes in Brazil while neighbors Peru and Columbia average 300 and 200 hours, respectively.
Nintendo could avoid the tariffs by opening a manufacturing facility in Brazil but has chosen not to do so. Instead, it has instructed its Latin American distributor to stop sending products to Brazil beginning this month.
Other companies in the industry also face similar challenges there. When Sony’s PlayStation 4 launched in Nov. 2013, it cost nearly $1800 in Brazil compared to $399 in North America. 63% of the price went to the government to import taxes and fees, according to Sony.