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Region lock stubbornness costs Nintendo a PR win

Maintaining this anti-consumer policy for so long is symptomatic of bad corporate decision-making

There's something genuinely surreal about sitting down to write an article about region locking in 2015. It feels archaic and almost nostalgic; I might as well be writing something about blowing into cartridge ports to get games to work, or bemoaning the long load times for cassettes. Yet here we are. Years into the era of digital distribution, long after we reached the point where it became technically harder to prevent customers from accessing games from anywhere in the world than it is to permit the same, region locking is back in the news. Thanks, Nintendo.

The focus of this week's headlines is the Humble Bundle promotion which Nintendo is running for a number of indie titles on 3DS and Wii U. It's a great deal for some excellent games and is raising money for a solid cause; plus it's wonderful to see console platform holders engaging with the Humble Bundle approach, which has been so successful at bringing indie games (and other creative works) to wider audiences on the PC. It ought to be a win, win, win for Nintendo, gamers and indie developers alike.

"In truth, there's only one reason for region locking in this day and age - price control"

Unfortunately, though, the bundle only works in the Americas; North America and some bits of Central and South America. Customers elsewhere are entirely locked out, a matter which has been a source of deep frustration not only to those customers, but also seemingly to Nintendo's own staff working on the project. The result is that what ought to have been a straightforward PR win for the company has turned bittersweet; there has been more widespread news coverage of the region locking debacle in the past few days than there has been for the bundle itself.

Although this is a terrible shame for the developers involved - and I sincerely hope that Nintendo can pull its thumb out of its backside and launch an international version of the bundle in short order - no sympathy is due to Nintendo in this situation. It's a problem entirely of the company's own making; the firm made a deliberate and conscious decision to embrace region locking even as the internationalisation of digital distribution made that look increasingly ridiculous, and until that stubbornly backwards piece of decision making is reversed, it's going to continue causing PR problems for the firm, not to mention genuine problems for its most devoted customers.

Remember, after all, that the rest of the gaming world has ditched region locking en masse - Sony gave it up with the PS3, even making it painless to use digital content from different regions by creating multiple accounts on the same console, while Microsoft made region locking optional on Xbox 360 (making a bit of a mess where some publishers enforced it and others didn't) before ditching it entirely on the Xbox One. At the same time Nintendo, ever the merry contrarians, went the opposite direction, not only maintaining region locking on the Wii and Wii U, but even extending it to the 3DS - in contrast to the company's prior handheld consoles, which had been region free.

The idiocy of a region locked handheld is staggering; these are systems which are quite simply at their best when you're traveling, yet lo and behold, Nintendo don't want you to buy any games if you go on holiday or on a business trip. The excuses trotted out were mealy-mouthed corporate dishonesty from start to finish; it was all about protecting customers, honest, and respecting local customs and laws. Utter tosh. Had those things been a genuine issue, they would have been an issue in the previous decades when Nintendo managed to sell handheld consoles without region locking; they would also have been an issue for Sony and Microsoft when they removed region locking from their systems.

In truth, there's only one reason for region locking in this day and age - price control - and Nintendo's calculation must have been that they had more to lose from the possibility, real or imagined, of people buying cheaper 3DS games from countries overseas, than they had to lose from annoying a chunk of their customer base, be they keen gamers who wanted to try out titles unlikely to be released in their regions, expats who want to play games brought from their home countries or parents who find that a game bought in the airport on the way home from holiday results not in a pacified, happy child on the flight but in an angry, upset child with a game that won't work.

"The thoroughly wonderful software that the company has been turning out in the past few years...has been regularly undermined by bad decisions in marketing and positioning of its platforms"

In Nintendo's defence, Satoru Iwata has recently been musing publicly about dropping region locking from the Nintendo NX, whenever that turns up. That the company is clearly planning to move down that path does rather confirm that it's been fibbing about its motivations for region locking all along, of course, which might be why Iwata is being cautious in his statements; it's a shame if such face-saving is the reason for Nintendo failing to keep up with industry moves in this regard, because the company is going to keep being periodically beaten with this stick until the problem is fixed.

Admittedly, there would be problems with removing region locking from its existing consoles - not least that Nintendo's agreements with publishers probably guarantee the region locking system, so even if it could be patched out of the 3DS and Wii U with a software update, that can't happen legally due to the contracts it would breach. What Nintendo could and should do, however, is to offer gamers a gesture of good faith on the matter by dropping region locking from all its first-party software from now on - and perhaps emulating Xbox 360 era Microsoft by making it optional for third-party publishers as well. I can envisage no legal barrier to that approach; it would earn the company enormous kudos for responding to its audience and dealing with the problem, and would cost them precisely nothing. There aren't that many easy PR wins floating around the industry right now; Nintendo should leap on this chance to show itself to be on the customers' side.

Wheels turn slowly in Kyoto, though, and it's probably too much to expect the company to react in a startup-like way to the region locking issue. In some ways it's Nintendo's strength that it reacts slowly and thoughtfully rather than jumping on every bandwagon, but in recent years, it's also been a weakness far too many times - and the thoroughly wonderful software that the company has been turning out in the past few years, perhaps the finest line-up it's produced in decades, has been regularly undermined by bad decisions in marketing and positioning of its platforms, many of which can be traced to a failure to understand where the market is and where it's moving.

Region locking isn't the biggest problem. Fixing it would be cheap and easy but would hardly be a panacea for Nintendo's issues - but it's a problem that's symptomatic, emblematic even, of the broader problems Nintendo has with putting its customers first and applying the same care and attention to its corporate aspects which it always applies to its software development. Fix a problem like this in a proactive, rapid way, and we might all start to believe that the company has what it takes to get back on top.

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Latest comments (17)

Morville O'Driscoll Blogger & Critic 4 years ago
In truth, there's only one reason for region locking in this day and age - price control
Excellent point.
Remember, after all, that the rest of the gaming world has ditched region locking en masse
Not so. Perhaps it's in the past when talking about consoles, but region locking is still very much a thing in the PC market, and for the exact reason I quote above - price control. Perhaps taking to task the publishers who set the prices and locks in PC gaming should be your next article. :) In any event, targeting Nintendo specifically in this brings some attention to the subject, but feels easy compared to the wider issue of price-control/distribution in videogames.

Still...

Nowadays, the reason is price control, yes. But I think perhaps there may be more to it than that in a legacy-sense. In the '80s/'90s, price control was one of the reasons for region-locking games. The other was to ensure full-control (as much as possible) of the supply path from manufacture to consumer. Differently-shaped cartridges meant that consumers could be assured of games working on the correct system (no 50/60hz issues), but also meant that Nintendo could control supply/demand, and gate-keep content. In this sense, Nintendo have always acted more like Hollywood - staggering release dates and controlling what consumers can see, when they can see it. Viewed like this, their previous region-free handhelds were a mistake, since they lost control of both prices, and distribution.

To boil-it-down to price control, whilst very easy, I think loses much of the nuance that this issue (potentially) has.

(Am I still bitter about no EU release for Final Fantasy 3/6 and no English release for Seiken Densetsu 3? Youuuuuuuuu betcha! :p )

Edited 5 times. Last edit by Morville O'Driscoll on 29th May 2015 8:55am

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Darren Adams Managing Director, ChaosTrend4 years ago
From what I know, Nintendo have over 25 years worth of banked money they could quite comfortably live off for a while yet. So for them there is no reason to address region locks as they lose control and as we all know, big companies like Nintendo love control. Can't see this changing unless it really starts to hurt Nintendo.

Edited 1 times. Last edit by Darren Adams on 29th May 2015 9:57am

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James Coote Independent Game Developer 4 years ago
Fixing it would be cheap and easy
The whole way NoE and NoA are set up in terms of organisational structure, legally and in terms of internal systems, from my experience suggests at least for the WiiU, we're stuck with the system as it is.

I think Nintendo need to just start afresh with NX. I have very strong opinions on what they need to change as a 3rd party dev, but just hoping they at least take on board some feedback as I really like what they stand for.
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Klaus Preisinger Freelance Writing 4 years ago
I do not have the feeling region locking is archaic. If anything, it affects more media types than ever before in my life.

All major mobile app stores use region locking. TV stations and streaming services use region locking, down to individual EU member nation locking each other out. Youtube integrated region locks and channel page rerouting as a new feature some time ago. Even Steam can lock out codes from certain regions should they be activated from other regions. Sony and MIcrosoft may not enforce it, but they sure support it. Every movie pressed on a plastic disc is region locked.

The article points to price control and rightly so.

Edited 1 times. Last edit by Klaus Preisinger on 29th May 2015 10:44am

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Keldon Alleyne Strategic Keyboard Basher, Avasopht Development4 years ago
I can see the case for offering lower prices for nations with lower incomes, but that doesn't stop them from limiting the lock only for that reason, ie, America, Japan and Europe are treated as one market and specific lower income nations are locked.

With Nintendo I imagine it's down to some other inane archaic value nobody cares about.
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Roland Austinat roland austinat media productions|consulting, IDG, Computec, Spiegel Online4 years ago
@John: The translation I don't get at all. Most games these days release in the FIGS languages besides their native English. I would love to play some games in German here in the US - my consoles usually even recognize the games, but then won't start them.

How much could a publisher lose by having a few expats import games in a non-English language into an English market?
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.4 years ago
So they bring something great to home and portable consoles and yet we're beating the dead horse instead praising the initiative?

While home console region locking is old so is complaining about it. It's not like NoE can't announce their own bundle tomorrow.

And isn't Nintendo the same company that indies hated just a few years ago? The same company that used to require a corporate office to become an official developer or get a dev kit? Now here they are showing a monumental change in their policy which culminates in the first home and portable console Humble Indie Bundle and instead of recognizing this, we're turning the horse into a pulp...again. Something they obviously cannot change mid generation.

Should they have just not done the Indie bundle at all? Because that's what this article seems to allude to. That the negative PR of the region locking is of greater import than the positive PR of policy change, indie cooperation, goodwill and cause support.
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Paul Jace Merchandiser 4 years ago
At the same time Nintendo, ever the merry contrarians, went the opposite direction, not only maintaining region locking on the Wii and Wii U, but even extending it to the 3DS - in contrast to the company's prior handheld consoles, which had been region free.
Not that surprising considering Nintendo is usually the last to accept some of the mainstream norms of console gaming. They held on to cartridges for the N64, they refused to put games on dvds during the Gamecube's era(as well as refusing to allow the system to play dvds) and they didn't take online multi-player seriously until last gen, although that one is debatable as some people still think they don't take it serious enough. And the only reason they even thought about launching the amiibo's line is because they sat back and watched two competitors launch first and then decided to jump on that bandwagon as well. For better or worse Nintendo will continue to be Nintendo but I do wish they'd get rid of region locking games on the 3DS.
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Shehzaan Abdulla Translator/QA 4 years ago
Klaus, if Nintendo was digital content powerhouse that would make for a better comparison. But we are talking, I'd imaigne, about physical region-lockout here as well.

To quote myself:
But this “relatively small number” of people [those chasing import games[ is growing in this increasingly international world. A Brit relocating to the States for work might take their 3DS with them, only to find they can’t play a legitimate, local game purchased with local currency even though it’s nigh on identical to the product they could have bought if they were still in the UK; region locking doesn’t just affect people looking to import games across national borders, but those looking to move across them as well.

And that means the debate around region locking isn’t necessarily just about imports anymore, but the mismatch between hardware and software. Put simply, the debate has changed from simply playing games from abroad to playing games locally in a modern world where the term “local” has become fluid.
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Shehzaan Abdulla Translator/QA 4 years ago
Not so. Perhaps it's in the past when talking about consoles, but region locking is still very much a thing in the PC market, and for the exact reason I quote above - price control.
It's been my experience that censorship is actually the biggest factor here, with Germany and Japan routintely being subject to harsher restrictions than other countries. But most of the games I've seen out there have global keys, or at least keys that inlcude a wide gamut of countries. The one exception being a certain block of eastern European countries/Russia likely because they have incredibly low prices there. But yeah, worldwide keys are exceptionally common.

But this raises the question on what kind of region locking we are talking about:

1) Being unable to purchase a game another region
2) Being unable to actually access the content physically (region lockout on disc/hardware level)
3) Requiring amother regions VPN to access content.
4) A combination of the above.
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Greg Wilcox Creator, Destroy All Fanboys! 4 years ago
@Paul:
http://en.wikipedia.org/wiki/Panasonic_Q

Yeah... it had to be imported and yup, Nintendo DID drop the ball on DVD by not thinking as far ahead as Sony and Microsoft did. And hey... wasn't the "no games on DVD" deal in play to prevent piracy? I can't recall anyone copying a Game Cube game onto a disc to play on any other Nintendo system. A PC? Sure.

That said, Nintendo isn't the only master of proprietary locking out when you consider Sony ditching readily available (and cheaper) Memory Sticks in favor of those expensive Vita cards. Oh well, at least the games all work fine no matter where you buy them. :D
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Morville O'Driscoll Blogger & Critic 4 years ago
[PC Region Locking]
The one exception being a certain block of eastern European countries/Russia likely because they have incredibly low prices there.
Russia/CIS, South America, and some Far East countries have keys that don't work else-where, due to being so cheap. :)

But this raises the question on what kind of region locking we are talking about:

1) Being unable to purchase a game another region
2) Being unable to actually access the content physically (region lockout on disc/hardware level)
3) Requiring another regions VPN to access content.
4) A combination of the above.
1 and 3 are the most common.

Within Steam, VPNing to a store outside your home country is in breach of the SSA. Outside of Steam, there is, for example, one (legit) South American store which mostly allows you to buy games if you don't live on that continent. But some keys they sell are Region-Locked to South America, and some keys are Rest Of World but they won't sell them to you unless you have a South American IP. VPNing is a possibility, but they've started blacklisting VPNs.

It is also possible to activate some keys on Steam via VPN (activation via VPN is not against the SSA, but buying via one is), but Valve are giving publishers more options to stamp out cross-region trading/playing, like having "Only Allow Run In" flags, which specify the country a game can be played in.

2 only occurs when a title is banned. For example, Germany's restrictions on certain symbols, means that you could purchase a ROW key from Amazon UK, only to find that it doesn't activate at all in Germany.

(A slightly out-of-date guide for Steam Region-Locking is here: http://www.ghacks.net/2013/11/21/steam-region-lock-guide/ )

Edited 3 times. Last edit by Morville O'Driscoll on 30th May 2015 8:07am

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Klaus Preisinger Freelance Writing 4 years ago
I grabbed a few stats about Germany. Roughly 140.000 Germans leave the country permanently each year. Only 18.000 head for a country that is another region in terms of DVD and video games. I say that customers migrating back and forth between regions is not an issue at all. I dare say that even before looking at which income brackets are moving the most and how those people correlate with NIntendo's (or anybody's) core demographic.

There is also nothing in the German law forcing manufacturers to create a German region because a game or movie might be barred from advertising itself, or worst case stopped from being sold. It is the publishers who react to the advertising ban long before any sales ban might happen or not. There is hardly a game with a sales ban. The reason why the USK (Software rating entity) does not want to certify games with Nazi symbols, when the FSK (movie rating entity) has no issues with swastikas in movies at all, is something the industry brought upon themselves. Microsoft, Nintendo, Sony, Acti-Blizz, they are all partial proprietors of the BIU, which in turn is a proprietor of the USK. They need to clean house and bring rating up to the standards which exist in other parts of German society, nobody else can do that for them.

Edited 1 times. Last edit by Klaus Preisinger on 30th May 2015 11:39am

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Shehzaan Abdulla Translator/QA 4 years ago
2 [ Being unable to actually access the content physically] only occurs when a title is banned. For example, Germany's restrictions on certain symbols, means that you could purchase a ROW key from Amazon UK, only to find that it doesn't activate at all in Germany.
I think you misunderstood what I'm saying here as this kind of lockout applies to 3DS games. If you buy a physical NA 3DS game it simply will not work on an EU 3DS. The physical cart is read and then rejected, refusing to boot up.

This is as opposed to a pure software lock: This is what Nintendo does with their e-store. You can only access the one from the same region as your hardware.

The point I'm making here is this: Is the region-restriction happening on an access level (a closed market or limiting the user to set regional marketplaces)? That is, is someone making it hard/harder to access non-local content? Or are we talking about a lock-out that affects users post-access? Or a combination of both?

The latter is total BS to me because if I've legitmatley paid for a game (and over odds after import duty, import specialist mark-up and a potentially poor exchange rate from a country that already sells games at a higher price than locally) then I should be able to actually play it on hardware that's identical to hardware from a foreign region.

As it stands I don't own a 3DS. I'm not going to buy two machines so I can play games in two different languages. That's absurd. So instead I've chosent to buy none rather than be locked into a single marketplace/language. I'll pick up a pair of 3DSs when the system has run its course. <<-- And this is important, for many people it's not about playing the market prices (again, I've often paid as much as 3x as much as I would locally) but simply accessing games in the language they want.

Edited 2 times. Last edit by Shehzaan Abdulla on 30th May 2015 5:47pm

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Shehzaan Abdulla Translator/QA 4 years ago
I say that customers migrating back and forth between regions is not an issue at all
Which begs the question: Why the region-lock if the people benefitting from region-freedom are such an insignificant number to begin with? Clearly whatever issues Nintendo is suffering under are self-imposed: After all, they don't affect either Microsoft or Sony. And haven't affected Nintendo until very recently.
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Klaus Preisinger Freelance Writing 4 years ago
Region lock is not in place to prevent the insignificant number of migrating players. Region lock is in place for the business reasons and due to the insignificance of migrating player, it does not cause a problem.
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Thomas Peter Technical Designer R&D 4 years ago
Why only compare the gaming industry? The whole entertainment industry uses still geo locking. What would we Europeans be happy if we could watch the same stuff on Netflix as the US customer!
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