E3 2012: Is Nintendo Ready To Shed The 3DS?

Posted by on June 5, 2012 at 12:05 pm

The star of Nintendo’s E3 press conference today was the unveiling of WiiU. While what we saw of their console was sometimes traditional and sometimes exciting, I can’t help but feel that Nintendo is putting most of their eggs into the WiiU basket. Nintendo’s handhelds, which have saved the company from complete annihilation during the N64 and Gamecube eras, came up short here with the 3DS getting only a scant amount of play time. They promised a “few minutes” of coverage today with another standalone event tomorrow as a faint mea culpa, but one can’t help but feel that the 3DS was a gamble that isn’t quite paying off. Here’s why.

The 3DS has been Nintendo’s albatross. Reporting its first annual loss in nearly 30 years, Nintendo made much of the fact that most was from radical price drops to their 3DS hardware. Originally launching at $250 a pop, Nintendo had to quickly cut out their healthy margins before sales began to lift. The auditorium was filled with investment bankers and other analysts (as I met on the shuttle to the conference) who are very curious how Nintendo is going to respond to a bleak past few years on the market since the Wii hit saturation.

The 3DS looks ancient. After a smattering of smooth HD WiiU footage, seeing the chunky visuals of a 3DS game like the new Paper Mario (above). Graphics aren’t everything, but when a $50 iPhone can churn out more interesting experiences aesthetically, it’s not gonna be a slow, deliberate choice for Nintendo’s main audience – kids. Nintendo doesn’t need massive, raw numbers to succeed, as Sony’s struggling Vita numbers have indicated.

3D was a bad train to hop on. Oh sure, Cameron made nearly three billion dollars for Fox because of 3D, and many films have gained 10-20% more dollars at the theaters because of 3D price gouging (and Sony themselves making bank on the trend by building it into their TVs), but of all the things to base a handheld on, glasses-free 3D wasn’t it. 3D, period, wasn’t it. While Nintendo’s diabolically weird dual-screen format was a risky wager that paid off in spades, 3D has done no such thing for their newest handheld.

The 3DS’s market is shrinking. Nintendo has traditionally bucked the status quo and been incredibly successful in the handheld space. But while they’d once held a monopoly, the market has shifted and Android/iOS are more than happy eating their lunch. With each new iteration, Nintendo’s opportunity to play the same card with “just good enough” hardware and a lack of services and useful internet connectivity.

While it seems Nintendo was more than happy to push the 3DS off today, it doesn’t doom their mobile efforts, which haven’t seen much innovation since the DS was unveiled in 2004, killing their Game Boy line lickity split. Nintendo’s strength then was in relying on bringing the crazy ideas of the DS in as a spare option, a ‘guess and test’ effect. Nintendo doesn’t need to make a phone per se, but the world isn’t reacting to them anymore.

UPDATE: An earlier version of this article featured an incorrect $350 launch price for the DS in the US, which was incorrect.

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