Nintendo and Harvey Norman fallout over Wii

With the Playstation 3 delayed until March 2007, the Nintendo Wii is set to make a big splash in the video game market this holiday season. But mass merchant, Harvey Norman, won't be getting its hands wet after negotiations broke down between it and the gaming giant.

Other than a handful of independent franchises, Harvey Norman stores have not stocked Nintendo products for a number of years. This was largely due to the Gamecube's flagging sales, general manager for computers, Rutland Smith, said. With media and analyst hype surrounding the launch of Nintendo Wii on December 7, the retailer was hoping to jump back on-board.

While the two companies had conducted early talks about stock, Smith said no final agreement came to fruition.

"Nintendo confirmed to us that they have limited stock for the Wii and would support its existing channel, which I think is the right thing to do," he said. "We're hopeful we can continue conversations with Nintendo. When stock improves we may be able to start selling their product."

Contradicting Smith's claims, Nintendo marketing manager, Greg Arthurton, said negotiations with Harvey Norman fell apart due to disparity between the two companies' terms of sale.

He said shipping numbers had yet to be confirmed for the Australian market.

"The terms and conditions that Harvey Norman was presenting were very unfavourable to us," he said. "So we took the decision to not deal with Harvey Norman at a national level. We will continue to distribute to the handful of independent Harvey Norman stores who we already have relationships with."

Arthurton would not disclose the proposed terms of the deal as they were confidential. Nintendo was no longer in discussions with the Harvey Norman head office.

Smith counter-argued Harvey Norman had never had a "detailed conversation" with Nintendo about its terms, but expressed interest in renewed discussions for the future.

"It's disappointing we will not be stocking the Wii coming into Christmas, but given the breadth of our range of gaming consoles, we do not believe it will have a significant impact on our Christmas sales," he said.

Arthurton said Nintendo was not disappointed with the Harvey Norman fallout. It would not disrupt its distribution plans as no stock had been set aside for the retailer.

"The amount of interest in the Wii is huge. Realistically, if we were supplying to Harvey Norman we would just be taking away stock from retailers who have been supporting us for a very long time," he said.

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