Nintendo Co. Ltd has decided on Saturday to end operations in Brazil due to high import taxes and the business model in the Latin American nation. The company announced its ending of the partnership with the distributor in the country and has no immediate plans for replacement.
The company did not want to set up a local manufacturing facility in the country which led to the high import tariffs for importing games and consoles. While the Nintendo Wii U was priced at $830 in the US, the console was priced at almost double the cost at R$ 1899 in Brazil. Game titles are also priced $60 more, on average, priced between $77 and $87.”Brazil commands high import taxes, costs and Nintendo products in Brazil, which did not make any sense,” said Van Zyll, Nintendo GM.
However the issue is affecting Xbox One and PlayStation 4 fans as the devices are priced $800 and $1500 more. Sony Latin America Mark Stanley had confirmed in a blog post that the Sony PS 4 would be priced at R$ 3,999 citing high import taxes. The company mentioned that Brazil was a country which had a large number of Nintendo fans, but the challenges in the local business model made the business unsustainable.
Nintendo stated that it would continue to monitor the business environment for serving the Brazilian fans in the future. Out of 189 countries, Brazil ranked 120 and was marked poorly in the “ease of doing business” category by the World Bank group this year.
According to reports, the country had the lowest score in “paying taxes” category and took about 2,600 hours to comply with the tax laws while it took an average of 266 hours in other Latin American countries. Until the issue is sorted out, Brazilian Nintendo users will have to import the consoles from Japan, United States, Paraguay or other Latin American countries.
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