Nintendo strengthens its supply chain with purchase of console distributor Jesnet

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Jeff Dlouhy/Flickr
Nintendo seems to be taking its upcoming console, currently code-named the NX, very seriously. The video game company has just purchased a 70 percent stake in Jesnet, one of the largest console distributors in Japan, for $46.5 million.

In an official statement, Nintendo said Jesnet is now a Nintendo subsidiary. Jesnet will also take over wholesale distribution of video game hardware from Ajioka. Jesnet and Ajioka are the largest distributors of gaming hardware in Japan. On Jesnet’s official site, it shows that much, if not all, the product it distributes is from Nintendo. Now that Jesnet has taken over all of Ajioka’s hardware distribution, this will put Nintendo in charge of its hardware distribution in Japan.

“This means that Nintendo will have an integrated system from the development through supply of its products, allowing for rapid decision-making and an improvement in sales service” said the company in its statement. “These steps are intended to strengthen the overall competitiveness of the Nintendo group and increase its corporate value.”

With this deal, Nintendo has now more vertically integrated its supply chain, allowing it to more efficiently get product to store shelves and also increase profitability.

Nintendo is set to release its new console next year. The NX is currently rumored to be a handheld/console hybrid. Like former Nintendo systems, it will use cartridges. Considering flash memory has not only gotten cheaper, but faster and able to hold more data, a handheld would seem to make sense. Graphically, the system is rumored to be more powerful than the Wii U, but not quite as powerful as the PlayStation 4. This is because it might use the Nvidia Tegra X2, a chip that’s based on Pascal and meant for more mobile applications.

The deal will become official at the beginning of the next fiscal year, April 3, 2017.

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