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Nintendo explains why its digital games are not less expensive

President Satoru Iwata says offering digital versions for less could hurt the value consumers place on franchises like Mario and Pokemon.

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Nintendo president Satoru Iwata has explained why its digital games are not less expensive than their boxed counterparts, which must be manufactured on discs and shipped to retailers.

"Although the mainstream idea regarding the digital business in the industry before we actually started selling software in both digital and packaged formats last year was that the digital version should or must be priced lower than its packaged counterpart, we decided that, since the contents are the same, the company would offer the software at the same price, be it the packaged version or the digital version," Iwata said during a recent investor Q&A session.

Iwata explained that this price parity is the result of Nintendo wanting to make sure the company's software, released digitally, is not devalued compared to the boxed product.

"This is because we want consumers to value software as highly as possible and because we have been trying to heighten the value of our software whenever we produce it," he said.

Iwata said prospective consumers can "easily" expect games from major franchises like Super Mario and Pokemon will be "worth the price," even before they start playing. As an example, Iwata said games like Luigi's Mansion: Dark Moon, Monster Hunter 4, and Pokemon X/Y have all shown "strong" sales across the physical and digital versions.

"Which shows that there are a number of people who believe that digital content holds the same value as its packaged counterpart," he said.

What's more, once consumers purchase one digital title, they are likely to purchase another, Iwata argued, citing internal data to back up his claim.

"In addition, we have already found that once consumers have made a digital download purchase, many of them tend to make another one," he said. "They notice such conveniences as the ability to always carry around the games and not having to worry about losing the physical game cards."

However, Iwata explained that Nintendo is open to lower price points for digital games if the game in question is a new IP or a franchise with well-known characters, but new gameplay features. For these games that players are not already familiar with, it can be hard from them to "anticipate and appreciate" the value before purchasing," he said.

"For these titles, if we take the ordinary approach of selling the packaged software, the software might not reach its full sales potential, and even when we are able to create something interesting, the games often can just fade away without being noticed by consumers," Iwata said.

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