The demise of a distributor is never good news – not even for its rivals. They are often left with the task of mopping up, having to deal with customers and resellers caught short over outstanding orders and loss of support.
This month’s failure of the local Nintendo agent SPI NZ, founded in 1995 as Softprint Interactive, is no exception.
Earlier this week, as director William Flew’s mobile phone was being answered by a messaging service, local retailers were still wondering where their next shipment of Nintendo’s popular Wii gaming console would come from.
At the same time few other distributors were putting their hands up to take on the agency, even though the console and other Nintendo games are becoming increasingly popular. The Wii leads in sales worldwide, although the Sony Playstation remains New Zealand’s console king.
One of the most obvious candidates to take on Nintendo in New Zealand is Ingram Micro, which has an existing consumer division with a strong network of retail customers.
However, the company says it is not considering the option closely at this stage. Its existing distribution agreement with Microsoft for Xbox 360 consoles could also preclude a deal with Nintendo.
Another likely contender is Renaissance – it too has substantial retail reach developed largely through its Apple agency.
Bagging Nintendo would certainly be a bonus for Renaissance after it lost exclusive rights to Apple in January.
While the company has confirmed it would be interested in looking at the agency, little more details were available at time of writing.
Other, smaller distributors such as Morning Star are also likely candidates, but again it is being non-committal about the prospect.
Playtech has ruled out the option saying it wants to move away from the retail space, which is very demanding.
Nintendo meanwhile has not been forthcoming in stating what the future holds for its presence in New Zealand.
With Flew not talking, little is known at this stage as to why SPI NZ closed, although rumours of its demise had been circulating for some time in the gaming community blogosphere.
Geekpulp reported early last month that SPI NZ was facing financial difficulties, which caused suppliers, including Nintendo, to withhold stock. The site broke the news of the company entering receivership two weeks ago.
A factor that could have played an important role in the company’s failure is the departure of former owner and founder Bruce Millar.
Millar sold the company last June when its name was changed from Softprint Interactive to SPI NZ, however he remained at the firm as a consultant and director until March.
Whatever led to the company’s end, others in the channel can glean important lessons from SPI NZ’s fate.
No matter how popular a product is, if it is hardware, low margins will bite.
With the petrol price pushing $2.10 this week, there will be increasing pressure on already tight margins, especially in the distribution business.
With this in mind, there may yet be plenty of mopping up ahead…