But will this new partnership cut into Gamestop's market share?
Nintendo and Amazon, who have had a rocky relationship for the past several years, appear to have largely settled their differences.
That’s a notable shift, since the companies have maintained a largely cold rapport for the majority of the past three years. In 2012, Amazon AMZN suddenly halted its first party sales of Nintendo hardware. (Resellers were allowed to continue selling the systems, though, at prices of their own choosing.)
Neither company would comment substantively about the relationship despite repeated inquiries by multiple outlets over the years.
The first hints of a thaw came earlier this year, when Amazon resumed first party sales of the new 3DS, though it still does not directly sell the Wii U. And the more recent addition of digital download code sales will give Nintendo NTDOY some parity with Sony SNE and Microsoft MSFT , both of whom have long sold codes to their games on Amazon.
While the improved relationship between Nintendo and Amazon could be a good thing for consumers, analysts say it’s not likely to give Amazon a substantial boost in market share among video game retailers.
“Amazon’s a player in the category, but they’re not one of the top players,” says Colin Sebastian, senior research analyst at R.W. Baird & Co. “Gamestop, Wal-Mart, and Best Buy are all bigger than Amazon—and digital downloads are a small part of the market, particularly among core gamers, who value having the residual value of physical discs.”
While Amazon is not yet one of the largest game retailers, it has been taking steps in the past few years to strengthen its position, offering deep discounts, especially during the holiday season. Sebastian notes that Amazon and Gamestop GME are the only two retailers who have not lost market share in recent years.
The digital partnership with Nintendo will give Wii U and 3DS owners another welcome avenue to buy download codes. Previously, digital game sales for the systems were only available via Nintendo’s eShop—but the buying experience of that storefront is not always smooth (and consumers are much more familiar with Amazon’s model).
After buying the code, shoppers can log into their Nintendo Network Account on Amazon, enter the code and the game will be sent directly to their device.
Nintendo is offering a variety of titles through Amazon, ranging from Super Mario Maker, its flagship game this holiday, to current hits like Mario Party 10, and classics like The Legend of Zelda.
As digital sales become less intimidating to a larger percentage of the video game world, the partnership could prove beneficial to Nintendo—especially with Amazon shoppers.
Historically, says Sebastian, the reason the site has not been among the top sellers is because players who bought games—even using Amazon Prime—had to wait to play them. Digital code sales—especially from a company that does not have an optimized digital experience of its own—could rectify that.
“When you purchase this content, you want to play it sooner,” he says. “Amazon Prime and two-day shipping help, but Gamestop and other retailers can offer midnight launches. As a result, Amazon has had a tough time breaking into the category among core gamers. Downloads are available immediately, though … [and] I think they’ll do ok with the more casual players.”
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