Nintendo cuts 3DS price on catastrophic quarterly results

While the sales period comes to an end, Nintendo just decided to do its own by slashing 3DS prices by 30-40% worldwide. From August 12th, the new handheld will be traded for 15’000¥ from 25’000¥ previously in Japan, when the western price drops from 249€/$ to 169€/$, a hefty 80€/$ cut!

But it would be wrong to see it as a philanthropic gesture from Nintendo : the company has no choice but to make this adjustment if they want to sort out this alarming mess. 3DS has been out for only four months, so this cut seems really sudden : it merely illustrates the hard time the system has to penetrate the market, hardly topping 3 million, an objective that was set to be met on late March. 3DS being the least selling system this week in Europe (yes even behind PS2) is another proof of its woes. The Japanese manufacturer has lost 25 billion yens over the first quarter for the second year in a row, and lowers its profit expectations for the 2012 year : of the previous 110 billion yens forecast, Nintendo now expects no more than 20 billions, 82% less! Even worse, president Satoru Iwata recently revealed that the company was selling 3DS at loss, despite years making profits on hardware.

So what’s next for 3DS? Editors are already steering away from the underselling system : 3DS versions of Assassins’ Creed, Megaman and Saints Row has seen their development cancelled and the nearly-finished Metal Gear Solid – Snake Eater 3DS has been abruptly postponed to 2012. The 3DS line-up for the end of the year fits in a footnote : only Star Fox 3D, Mario Land 3D et Mario Kart 3D are mentioned in Nintendo’s press release. They seem to forget Tales of the Abyss 3D, the only decent game coming to the handheld this winter.

Despite this gloomy outlook, 3DS sales should pick up fairly well, because Nintendo essentially set 3DS price on par with DSiXL. Shoppers now have access to the new product for the same price as the old one, with the possibility to offer to their kiddies the newest Mario games. Gamers will have to wait for better games to justify the purchase of the system, but Nintendo has already stopped relying in them. The Kyoto-based firm looked like it really wanted third parties to shine at 3DS launch, but that never happened since no one bought their games. The manufacturer therefore quickly switch to the good old policy of releasing remakes of its most popular franchises every 2 or 3 months, so as to please parents who cast a dubious look at Dead or Alive Dimensions.

This new price point should also effectively counter PSVita, at least in the West. Already close to economic suicide at 249€/$, Sony’s handheld won’t be able to follow suit. The average buyer, too busy playing free cell on its new Iphone4, hasn’t got 249€/$ to throw in a new handheld, however hi-tech it may be. In Japan, the result of the portable war will depend on which exclusive games both systems will have, PSVita needing as many strong licenses as PSP currently enjoys. If Sony can keep securing ambitious third party projects off Nintendo’s range, PSVita has a shot to win the market. TGS should give an answer to that.

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