3DS In Crisis, Nintendo Must Execute Drastic Plan B

The historic price drop of the 3DS announced overnight by Nintendo is a transparent acknowledgement by the most successful company to ever make video games that it is struggling.

Nintendo cut the price of its flagship gaming handheld by an extraordinary 32 per cent, while making some dramatic turns. It appears to be pivoting to de-emphasise 3D and is amplifying its downloadable lineup to put the 3DS on track to have more games on sale through download than in physical stores — a likely first for any dedicated piece of video game hardware, be it handheld or console.

There is no doubt that miserable sales of the 3DS spooked Nintendo into action. Prior to the release of the 3DS sceptics wondered if Nintendo was rushing into a repeat of its Virtual Boy mistake, creating a 21st century version of the 1995 virtual reality headset that had previously been Nintendo's loftiest flop.

Nintendo's crisis, however, is more like the one its rival Sony has spent the last half decade trying to recover from. The 3DS has become Nintendo's PlayStation 3. It is in Nintendo's interest to invalidate that analogy in under five years.

Like the PS3, the 3DS launched at a questionably high price, $US600 for Sony and $US250 for Nintendo.

Both machines followed juggernauts, Sony's succeeding the competition-obliterating PS2, Nintendo's the twin powers of the DS and Wii.

Each quickly confronted its stiffest challenge from competitors it didn't previously have to sweat, the PS3 from the wimpy, wacky but wonderful Wii rather than the presumed number one contender of the Xbox 360. The 3DS has not battled Sony's PSP but the accidentally important Apple and Android digital swiss army knives of entertainment, machines that empowered the makers of Angry Birds and hordes of other cheap games to turn smartphones into the premiere aspirational portable gaming devices, gamers who desire buttons or control sticks be damned.

A foolish Nintendo would not have reacted as it did last night. If the 3DS were another Virtual Boy, it could not.

The Virtual Boy was a boulder. Its graphics were always going to be only red; it was always going to have to be worn on its player's head. The 3DS, with its 3D effects merely being optional and its innards malleable with firmware and virtual storefront updates, is at least a shrub, and it is now getting a new pruning, as the PS3 did.

Sony slowly transformed its too-expensive PS3 from the inside out, dropping support for PS2 games while building its online store, repeatedly revising its operating system, drip-feeding new features, dropping price, restoring rumble to its controllers and eventually slimming the console. It adopted the Xbox 360 strategy of changing the console from within, perhaps too slowly, which is one reason it still lags behind its competitors.

Through all of this, there is little talk of 3D, which was boosted by Nintendo, as it was by movie companies, as the next big thing gamers would flock to. Hollywood studios are suffering from consumers' own disinterest in 3D and now Nintendo, in its newest 3DS commercial in Europe (see it on the left), isn't even promoting the feature. This follows Nintendo's own top personnel saying last month that it would be fine for 3DS owners to play the system with the 3D effects turned off.

Nintendo's 3DS is in dire straits today, and Nintendo is reacting drastically. Some will say the company is doomed and we may indeed see the limit of the dedicated handheld gaming market now in sight, but the drastic moves of last night allow for a rebirth. A humbled Nintendo gets a do-over next month when the price drop kicks in. The 3DS will finally be affordable, finally be a bargain compared to an iOS device and, as its digital shop grows, may finally be a player as a device for downloadable games.

Nintendo needs to avoid Sony's mistakes and slow recovery of the PlayStation 3, as the 3DS era may not be over, but the era of untouchable Nintendo handhelds is now a thing of the past.


Comments

    Is it worth the money though to have access to a catalogue of 20 year old Game Boy games?

      Yeah... it's kind of like the Virtual Console on Wii, or the PSOne, NeoGeo and MegaDrive games on PSN. They're nice to have there for nostalgia's sake, but not a reason to buy the hardware.

    still 250 down here, still region locked. better luck next time, ninty

    At least the PS3 had some good games lined up. The 3DS has a lot of work to do still.

    Note to Nintendo now that you have dropped the price. Stop having the 3D effect be the primary selling point of your games. Developers aren't making them. If you sell non-3D games then you might actually start to get some interest now.

      Part of the problem as I see it is that the console's big selling point is the glasses-free 3D. Then there's a little slider there which you can use to completely turn the effect off. That slider is basically a tacit admission by Nintendo that their big selling point is a gimmick - you slide that all the way down and you can play every single 3DS game without the 3D effect, which suggests that there's no real reason to have it there. Turn it off and you lose a cosmetic nicety, but the games will work just fine.

    The problem is the 3DS is region locked! I am not getting it as long as that feature is kept in there!

    I wonder if this indicates a change in policy from Nintendo, too.

    They've always insisted that hardware be sold at a profit from day 1, while other manufacturers tend to sell at a loss to keep the price down in order to boost hardware sales, then make the money back later on software.

    The 3DS only came out 3 months ago, so you'd assume their costs haven't come down significantly, especially if they're not getting the sales they expected and so wouldn't be enjoying the economies of scale they would have expected.

    So you'd have to think they're either (a) now selling the 3DS at a loss or (b) were putting an obscenely high margin on it before the price cut if they can cut it by that much and still be making a profit on it.

    too little too late.
    the region locking needs to go.
    the ridiculous game prices need to be slashed in a big way.
    exciting, complete, polished, games need to come out.
    downloadable store is shit and varies region to region -pricing especially! where the hell are all the classic games!!??!

    it was very arrogant of nintendo to think they could launch when they clearly weren't ready, especially with the prices of hardware and software, and considering the gaming and entertainment options we have nowadays.

    But here's the kicker -they seem to be going down an even worse path with wii u - no hard drive, not many 1st party games in development, major 3rd parties mia, no multi player, limited streaming range & cant use as a portable, no signal that they are investing heavily in online services or that a complete range of downloadable classics will be available -still no godamn yoshis island!!!!!! come on!

    Nintendo, just more games asap. That is all.

    i agree with most comments above.
    region locking was always a stupid idea.

    i actually like the 3d effect.
    ive been playing oot this last week and i genuinely believe the 3d makes the game more immersive. BUT the 3d effect is not consistent and it does give me eye fatigue. i am sure that most games that arent as flawless as oot i will opt into 2d.

    but really 2d/3d doesnt matter, the biggest problem is games, there arent any and when i opened the estore for the first time i was gobsmacked by how desolate it felt and how much it cost.

    i expect xbla quality games for xbla prices and small little widgets and nes/gb games for no more than $1-3 if not free.

    i expect a large number of small downloadable games for cheap AND AAA quality retail games for the console.

    i got it for zelda. but i only play it at home. i felt like a more beefy portable gaming system than my iphone but so far its not what it needs to be to fit in

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