Nintendo did it again. There’s no other video game company that can take people by surprise through good times and bad as the historic Japanese corporation which gave birth to Mario and Samus Aran (and a thousand of other memorable characters). Unexpected announcements concerning both economic decisions and gaming ideas have always been a kind of particularity of Nintendo, and also today it lives up to its name: 3DS price has been enormously cut and video gamers communities are literally exploding in several directions, from the unqualified pessimistic attitude which wants Nintendo to present a new handheld device next year to the huge upbeat wave ensuring much higher sales and changes in third parties strategies.
But let’s explain this in an orderly fashion. The news came out along the 2011 Q1 financial report released early this morning; at first, Japan was informed about the price decrease with a PR stating that Nintendo had decided to change the manufacturer’s suggested retail price of the console starting from August 11, 2011: a cut of ¥10.000, down from ¥25.000 to ¥15.000, the price by which the original DS was released back in 2004; ¥15.000 means that from the next month 3DS will be one of the cheapest console on the market, below PSP (¥17.800), PS2 (¥16.000), Wii (¥20.000) and DSi XL (¥18.000) and on par with DSi. It’s also clear why Super Pokémon Scramble, original planned for today in Japan, has been moved on August 11.
Then North America got its reduction too; one day after the Japanese cut, 3DS will shift to $169.99, down from the original $249.99 price, for a $80 decrease, less than the other territory (¥10.000 are roughly $130) but still an important amount. Nintendo press tried to have a warm tone by citing the arrival of Super Mario Bros. 3D Land and Mario Kart 7 during the holiday season and the reward in terms of 20 free NES and Game Boy Advance games available on the console eShop for the early adopters.
As usual, PAL countries came at last; Australians will be able to buy a 3DS for AU$249.95 down from the previous AU$349.95 thanks to a consistent $110 decrease, while in Europe there is not an official recommended retail price yet. Nintendo of Europe has confirmed the initiative and the compensation program, but even if rumors want the new price around €169 (and £130 in UK), it’s still not possible to quantify the actual drop.
Hence, a question obviously arises: why do Nintendo decide for such an aggressive price in all of its territories just few months after the launch? This cut is unprecedented in some way; Sony adjusted PS3 price many times but always introducing a new model or new retail configurations (e.g Slim, 80GB) and Nintendo did as well, but later within the console life cycle or, following the other companies, by introducing new versions of the same console as occured with DS and its 3 revisions. It seems also that with this decision, Nintendo will make a loss on 3DS hardware as Bloomberg Japan as reported, which probably falls in a safe range to allow the company to have a leeway, since this is the first time that it undercuts a console.
As a matter of fact, many factors brought to astonishing price slash, but it’s important to think objectively about the matter without being affected by the negative feeling people appears to have in the last weeks; in particular I’m talking about the game cancellation affaire, exaggerated in many Internet communities since just few titles has been scrapped indeed, and not because the sales of the system but for other reasons: Mega Man Legends 3 has been adandoned because of the lack of fans participation (while someone would be willing to wager that it’s because Inafune-san has left the project) considering the fact it has never been greenlighting; Assassin’s Creed: Lost Legacy had never entered in production and some of its concepts were channeled into Revelations, the new episode for PS3 and 360; DJ Hero suffered the reassessment of the Hero brand due to Activision following the low sales of the last entries (on home consoles, not on DS, where Guitar Hero games have always sold quite well); Hudson titles, such as Omega Five and Kororinpa, instead, felt the acquisition of the company by Konami which now totally owns it. Read up is not costly nowadays, therefore ascribing this events to a presumed low performance by 3DS is specious, especially when people play delays off as oddities that never happened in the history of the video game industry: guys, wake up, this has always occured! Software houses might have many projects under active consideration, but not all of them see store shelves, in particular for young products.
Even the 2011 autumn / winter line-up has been criticized to be too poor in terms of quantity and quality, which is truly a madness: in the West there figure names as Mario Bros., Mario Kart, Kid Icaurs, Tales of the Abyss, Pokémon, Sonic and Fifa 2012, while in Japan there are Inazuma Eleven, Dragon Quest Rocket Slime, Ace Combat and many others in addition to the former. The situation is far better to the one DS incurred during its first year, with just few important brands and almost empty months; 3DS has already games like Ocarina of Time 3D, Dead or Alive Dimensions, Pilotwings Resort and Ghoster Recon: Shadow Wars, while the precursor had to be satisfied with Wario Ware, Pokémon Dash and Yoshi Touch & Go.
Sometimes the problem resides in people’s memory which can hardly remember how the things went back in the days and distort the present making normal facts surprises no one could expect, perhaps spilling grudge towards a company always in the spotlight.
3DS sales has been reported in Q1 results: 3.61 million units were sold to retailers in February and March, when the console was released in Japan and the West respectively, and just 0.71 million units were shipped from April to June, meaning that the first shipment was large enough to supply also the following months; the performance was not so spectacular after the launch, but the reasons are straightforward: DS is still strong (Pokémon Black / White saw its release in March as 3DS in Europe and North America) and is keeping to sell well in particular outside Japan; even if the line-up can be considered good as previously said, it lacked a specific software which was able to persuade consumers as Brain Training had done during DS heyday (and 3D seems to not work in this sense); the high price is surely a deterrent for the purchase… So Nintendo decided to cut it dramatically, indirectly admitting that part of the problems were partly due to this. I wouldn’t bring Apple threat in the picture, since we don’t have clear data so far proving without any doubt that mobile gaming is invading handheld consoles market.
What will the consequences be in the next months? First of all, the new price may sound as a response to Sony, which set PSVita price at $249 (and €249) for the lower product line; if the new PSP see the release at the end of the year, it will be damaged a lot by the aggressive Nintendo strategy made of a low price and huge brands. Moreover, a shake is to be expected in Europe and North America, where 3DS seems to performe worse; in Japan weekly sales are constant around 25-30.000 units, in par with PSP, the hottest platform over there, and the drop could easily make the console top 50-60.000 units on a weekly basis, arriving to Wii levels during 2007 and 2008.
There will be also some problems linked to the perception of the product among the investors (in fact Nintendo shares value fell by almost 3 points during the current day) and the consumers, but if the console manage good numbers in the following months, I’m sure people confidence will be back in a flash.