Things haven't been so super for Mario lately. Peach left him for Luigi, they repossessed his kart, and he's forced to eat beefaroni because real spaghetti is too expensive. Guess he should have sold his Nintendo stock before the 3DS launched.

Nintendo conquered the video game market through innovation. They introduced us to motion and touch screen gaming, then 3D. Now it seems the juggernaut has finally run out of gas. Revenue forecasts have plummeted 80 percent. The company's stock value has dropped 50 percent since last February.

The Nintendo 3DS is being blamed for the company's poor showing. The portable had a stellar launch back in February. Since then, sales have been lacklustre. There's nothing wrong with the 3DS itself. We don't have another Virtual Boy on our hands here. It's a solid piece of hardware that works as advertised, and does a fantastic job at it. However, panicky pundits, such as IGN, are already declaring it a maybe, sort of, failure. That's not the case. The gaming market has changed a lot since the DS launched, yet Nintendo is still using the same approach they've used in the past.

The three things holding the 3DS back are price, lack of software, and increased competition from smartphones.

The 3DS is the most expensive successor to the original Gameboy. With inflation factored in, only the Virtual Boy would cost more today. Prices for Nintendo hardware have been creeping up over the years. Studies into manufacturing costs show the company making fat margins on every console sold. It is estimated the 3DS costs about $100 to build. Even assuming marketing and R&D costs the same, $50 per unit is still a tidy profit.

Nintendo has long refused to sell their products at a loss. So does competitor Apple. Logically, that makes sense. However, that sort of thinking changed with the 2008 recession. People don't have as much disposable income as they did during the DS and Wii's heyday. Nintendo products are marketed at a younger crowd. Parents will think twice at dropping that much cash on a "toy".

Competing products, such as smartphones, are being seen as more economical than standalone systems. Apple sells their iPod Touch in the same price bracket as the 3DS. Not only is it a virtual Swiss Army Knife of media consumption, software is a fraction of the price. Most games are under ten dollars. Compare that to 3DS titles, which sell similar products for, on average, two to four times more. That's the advantage of digital distribution. There's less cost overhead, which opens the market wide open. Why spend upwards of $400 buying little Johnny multiple devices when one will satisfy him for half that?


Gamers scream that iPhone games aren't comparable. They aren't as in depth, or lack the experience of traditional controls. They're partly right, but it's a moot argument. Most of today's most popular games aren't deep, story driven experiences. Angry Birds, Call of Duty and the like offer simplified gaming in bit sized chunks. Enough to satisfy the short attention spans of today's young gamer. iOS actually does have these in depth games, such as Final Fantasy and Zenonia. It can also surf the web, download your tunes, let you shop for a new outfit, and pay your taxes.

Somewhat ironically, the same argument can be made about the 3DS. Games like Steel Diver and Pilot Wings aren't what you'd call deep. They offer the same experience as many $1.99 apps, yet cost significantly more. The system lacks the strong, original titles that Nintendo is known for. What we get is the same glut of shovelware that's infiltrated the Wii. Very simplistic games sold for high prices compared to competitors. The 3DS has few in depth titles coming down the pipeline, and that's it's problem. In trying to adopt a smartphone, app-style, shovelware based business plan, Nintendo is alienating their core fan base.

This doesn't mean the 3DS is a lost cause. The DS went through similar growing pains way back in 2004. The hardware is fantastic. Nintendo just needs to get software production kicked into high gear. No console can be successful if it doesn't have the games to back it up. It doesn't matter how spectacular the technology is. Nintendo will bounce back, as they always have. They just need to learn how to market themselves and their games better in today's app-based world.

Title image copyright Device Magazine
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