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Nintendo posted an annual loss of about $534 million on Thursday, the companys first year in the red ever since its financials became a matter of public record. In an attempt to take some of the attention away from the loss while illustrating that it is making changes for the future, Nintendo said in a briefing the next day that it would take more decisive steps toward selling its games through its digital eShop rather than as packaged goods.

Up until now, Nintendo has been the last videogame platform maker to draw a bright-line distinction between physical games and digital ones: A game for one of its platforms may be developed on disc or as a download, but never both. Starting with New Super Mario Bros. 2 for 3DS in August, it will erase that distinction, allowing publishers to offer downloadable versions of their packaged games. The Wii U console will have the same feature.

Its always big news when Nintendo boldly decides to leap feet-first into the present, but the most interesting part of these announcements was Nintendo doing its best song-and-dance to sell the virtues of digital distribution to brick-and-mortar retailers.

It has to, of course. Nintendo may well understand that digital game sales are the inevitable future, but for now it still makes the vast majority of its money selling games through traditional means. So like Microsoft and Sony, it wants to attempt to transition its business from packaged goods to ones and zeroes in a manner that doesnt alienate the GameStops and Wal-Marts of the world.

So it attempted on Thursday to thread the needle, delicately keeping retailers happy while moving toward digital.

This approach can be beneficial for retailers by creating a new business opportunity for them, said Nintendo president Satoru Iwata at the briefing.

Hows that, exactly? Nintendo says that while it will continue to sell downloadable games at the manufacturers suggested retail price (meaning the same price as the physical copy) on its eShop, it will sell bundles of game download codes at a wholesale price to traditional retailers. Thus, retailers will be able to make money on digital sales by selling the download codes to customers who come into their stores, and can reduce the price of these as it sees fit.

By taking this approach, there will not be a situation like, There is no markdown for the digital products while markdowns are the norm for the packaged software, Iwata said.

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Analysis: Nintendo Attempts to Thread the Digital Needle