We’ve covered Nintendo’s latest handheld with great interest here because the fate of the 3DS has many implications in the marketplace, and not just for gaming. As a consumer electronics product that has both a high quality 3D feature-set and affordability relative to other 3D options, the 3DS is an interesting case study for home 3D technology. The 3DS is following the Nintendo DS, the highest-selling handheld of all time, and only second to the PS2 in overall console sales. However, the increasing smartphone market share and wide variety of free or inexpensive gaming options could hamstring the handheld gaming landscape. As a previous blog post mentioned, courting gamers will be a critical factor in the long-term health of 3D technology. You can also check out our comprehensive 3D trending report from last year that deals with both the 3DS and larger trends in 3D technology here
By mid-summer, no less than six months after release, the Nintendo 3DS was left for dead by critics and analysts. Complaints from consumers resonated in sales numbers. The system didn’t have any games. The 3D effect wasn’t great. The battery life was terrible. Eventually, lagging sales forced the company to alter course and slash the price on the system. With the crowd hoping for a home run, it seemed Nintendo had struck out looking.
Amid the doom and gloom however, the 3DS was actually slowly beginning to build something that slightly resembled momentum. June had seen the (re-)launch of Ocarina of Time, the first major release in the 3DS lifecycle. While the release of the Nintendo 64 critical-hit was met with much of the same praise it received in 1998–when it was first released–it was not enough to excite moribund sales. The $300+ price point for system and a remake was too burdensome for most gamers in a rough economy. Nevertheless, Nintendo finally had a franchise icon they could push with the 3DS.
When Nintendo actually cut the price in the 3DS from an MSRP of $249.99 to a much more palatable $169.99, sales spiked. While the price cut was a black spot for Nintendo, and precipitated expectation of their first annual loss in decades, there was at least a silver lining. The lower price point actually worked in luring more gamers to the system (according to NMM, ownership of the 3DS surged 33% between Q2 and Q3). After nearly six months of sputtering in first gear, the leaner price made the system more broadly appealing.
Late Autumn finally saw Nintendo drop the Mario sledgehammers, releasing Super Mario 3D Land in November, and Mario Kart 7 in December. Both were released to critical acclaim, and both quickly topped 1 million in sales. More importantly, they were both engines for 3DS sales. Since the release of the two games, the 3DS has gone from laggard to leader, reaching 4 million units sold faster than even the Wii.
One of our big themes with the 3DS over the first half of its release was the lack of first-party games that are so critical to Nintendo. Failing to launch the system with compelling titles and with a hefty price tag (remember, the Wii’s launch MSRP was $249.99 as well), was enough to keep gamers away. By appealing to gamers on both price and quality, Nintendo once again may be on the road to success in the handheld gaming market.
Looking forward, the 3DS has all the tools (growing ownership base and a huge slate of upcoming releases) that should propel both hardware and software sales over the life of the system. However, a challenger approaches: Sony’s newest handheld, the Vita, looks to be a slick and well-equipped combatant with a high-quality core of launch titles. Whether the Vita can knock Nintendo off its recently acquired perch remains to be seen, but Nintendo’s head start, and subsequent lump-taking in the market, may prove to be a critical advantage.
The Vita will be available starting February 22 in North America (MSRP $249.99).