Hard times for Nintendo
When it went on sale in February, many expected that the Nintendo’s new 3DS console would inject new life into Japan’s gaming giant. But things didn’t work out that way. Some of you may recall back in early April we wrote about a sudden decline in the price of Nintendo’s then fairly new 3DS.
Yesterday the company announced an even bigger price cut, as the price of the 3DS plummets from the initial price of 25,000 yen to 15,000 yen in Japan effective August 11. Nintendo’s president Satoru Iwata posted a public apology letter (PDF, Japanese):
Never in Nintendo’s history have we lowered prices to such an extent, less than half a year since the product launch. But we have judged that unless we move decisively now, there is a high possibility that we will not see many of our customers enjoying a Nintendo 3DS. (NYT translation)
Nintendo also posted it’s financial highlights for the past three months today, and it’s pretty shocking to see that even with the new 3DS console, the company still could not surpass its sales performance from the year before (see chart below). Certainly the March 11 earthquake didn’t help things either, but as I said, the 3DS was floundering weeks before that.
What’s astounding about the situation is Nintendo’s stubbornness to adjust to the situation. When you think gaming in Japan these days, many people would think of mobile gaming companies GREE and DeNA before they mention Nintendo. Speaking for us here at Penn Olson, that’s who we think of at least.
Are mobile gaming companies eating Nintendo’s lunch? Could Nintendo rebound if it developed software for platforms other than its own? iPhone anyone? It would at least stand a chance. But it doesn’t want to, recently asserting that its strategy “hasn’t changed and won’t change.”
It will be interesting to see if the company can return to gaming greatness with the upcoming Wii-U. I’m not quite willing to underestimate Nintendo innovation just yet, so I’m optimistic on that front. But as for portable consoles, it looks like the 3DS is Nintendo’s answer to Windows Vista. If it can’t come up with better hardware, then I really hope it can drop some games for iOS, Android, and other mobile platforms.
Super Mario would pose a much bigger threat to Angry Birds than those piggies ever could.
[Photo: SuperMarioLuigi.com]
Oh man a company dropping the price of a product to make it more accessible to its market audience. Nintendo must be losing the battle.
Honestly this was probably done for two big reasons.
1. Having a handheld be just as much money as what their new console will be is not a good pricing decision.
2. Undercutting the Sony Vita, which before anybody tries to attack me I want to succeed. Because more systems in a market stirs competition and progress. That being said the price of 250 american is a lot of money for any handheld, and 300 is even worse.
And while it is probably related, there aren’t triple A titles on the 3DS yet. But they’re coming and they’ll be fun. You have a new mario Luigi’s mansion, and Kid Icarus to name a few. Plus the backwards compatibility of all the DS library.
It was merely the price holding the system back.
Look at the PS3 during its first year. It didn’t have a good library and the price scared people away. Even after more good games came out the price scared people consumers away. At least with the 3DS you’ll know Nintendo will deliver with good games.
I can’t remember but I believe the DS had a very similar launch year except it was cheaper on its release than the 3DS.
I have faith in the systems life and I can’t wait to pick one up myself.