When Nintendo announced last week that it would soon start offering the majority of its retail 3DS and Wii U games as digital downloads, it represented a major change in policy for the company. But buried in the announcement was what could possibly be an even more significant change in Nintendo's relationship with brick and mortar retailers.

For the past few years, Sony and Microsoft have both let game retailers share in a slice of the downloadable marketplace by selling codes for downloadable games and add-on content directly at the register. The retailer acts like a physical Xbox Live Marketplace or PlayStation Store here, sending the purchase request directly to the platform holder's servers and printing out a download code. In exchange, the retailer pockets a commission of 15 to 20 percent of the sale price, which is set by Sony or Microsoft as identical to the price offered on their online stores.

The relationship Nintendo is envisioning for retailers selling its downloadable games is more akin to the standard wholesale model currently used for physical games. Under Nintendo's plan, retailers would buy download codes directly from the publisher at a lower wholesale price, then resell them to consumers at whatever price the retailer thinks will bring in the most profit.

At first glance, this would seem to suggest that retailers could quickly mark down underperforming downloadable games, just as they do currently for physical games. But without the incentive to clear out floor space for new products, it doesn't make much sense for a retailer to offer a downloadable game at below Nintendo's wholesale cost. Then again, it doesn't make much sense for retailers to sell downloads much above the wholesale cost either, given the lack of significant distribution costs and the price pressure of competition from other retailers.

Nintendo doesn't see things shaking out that way. "There are several types of retailers," Nintendo President Satoru Iwata said in a recent investor Q&A. "A retailer that offers products at comparatively high prices but provides good services and is in a convenient location, or a retailer that only focuses on offering products at lower prices than others do. I expect to see sound competition among retailers that take advantage of their strengths as they have done so far."

In that same Q&A, Iwata was reluctant to discuss how its wholesale prices would differ between downloadable and physical versions of the same game. He did suggest that retailers should expect much smaller margins from selling the downloadable versions. "If the retailers can sell our software without having to shoulder the inventory risks, it is natural in fair business transactions that there will be changes in their margins, for which the inventory risks are taken into consideration," he said.

And Nintendo doesn't seem to think the reduced distribution costs for downloadable games should translate to lower prices for consumers, either. In fact, Iwata said the suggested retail price for downloadable and physical versions of the same game "will be the same in principle, so that consumers can make the choice." This is a marked difference from Microsoft and Sony, which often (though not always) sell downloadable versions of games at prices lower than their physical counterparts.

Iwata justified the suggested pricing parity by arguing that the value of the game is in the software itself, and that the distribution format for that software shouldn't have any impact on a game's value to the consumer. In fact, Iwata argues, some consumers may actually find more value in a version of a game that is permanently stored on the system, without the need to carry around a disc or game card (never mind that these games are tied to the system they're first downloaded to, and can't be resold like physical games).

Given the business realities of the downloadable game market, it might seem a bit odd that Nintendo wants to bring brick-and-mortar retailers into the loop in a meaningful way at all. After all, if Nintendo wanted to, it could cut out the middleman and offer downloadable games directly to consumers at wholesale prices, reaping the revenue much more simply and directly.

But Iwata says brick-and-mortar retailers serve an important marketing purpose, even for games that are purely downloadable. "We recognize that one of the biggest hurdles for the expansion of our digital business is the limited methods to expose digitally downloadable products to potential consumers," Iwata said. "If only the consumers who proactively visit the Nintendo eShop are aware of the digital download software that we deploy, there is no chance that our digital business can drastically expand."

In other words, Nintendo is reluctant to give up entirely on the old ways of doing business, even as it takes its largest step yet into new forms of game distribution. This odd wholesale-meets-retail-downloads business plan reflects that same reluctance, and shows a company that seems unable to face the inevitable rise of fully digital game distribution.