3DS off to a slow start - Nintendo lose some money

[Lint]

Faced with horrendous earnings and ongoing weak demand, Nintendo has dramatically lowered the price of its 3DS handheld system just four months after the system hit store shelves.

Starting Aug. 12, the company will drop the price of the 3DS from $250 to $170 -- a move it hopes will spark flagging consumer interest and lay the groundwork for a strong holiday season.

And, in a move designed to prevent a backlash from the system's early adopters, Nintendo announced it would give existing owners of the system 20 free downloadable games from the Nintendo eShop.

The collection of free games is a pretty notable one. Starting September 1, people who paid the full $250 for the 3DS will be able to download 10 NES Virtual Console games for free before they become available to players who waited for the hardware discount. The titles include Super Mario Bros., Donkey Kong Jr., Balloon Fight, Ice Climber and The Legend of Zelda.

Then, at the end of the year, they'll get another 10 Virtual Console game -- this time from the Game Boy Advance lineup - which will only be made available to the $250 early adopters (Nintendo has euphemistically labeled this group members of its "3DS Ambassador program.") Among the titles are Yoshi's Island: Super Mario Advance 3, Mario Kart: Super Circuit, Metroid Fusion, WarioWare, Inc.: Mega Microgame$ and Mario vs. Donkey Kong.

The move might quell frustration from existing users and lure in new buyers, but it won't prevent people from pointing to the 3DS as a significant stumble on Nintendo's part. The company had bet heavily on the system -- which lets users play games in stereoscopic 3D without the need for special glasses -- to help it regain ground lost to mobile devices like Apple's iPhone. But the high price and weak launch lineup of software quickly killed any momentum.

"It is now clear that the combination of these new features is not necessarily easy-to-understand by just saying one word to those without experience," said Nintendo CEO Satoru Iwata at the time. "We have found that not all Nintendo 3DS users enjoy this software. There seems to be more than a few consumers who have Nintendo 3DS hardware but don't know about this software and possibly haven't had a chance to get interested in it."

Nintendo hasn't had a good year on the console front, either, with Wii hardware and software sales dipping significantly. The company did not mention any cuts for that system, however.

Beyond the 3DS price cut, there is hope for the system as it finally appears to be beefing up its software lineup. Critically-acclaimed hit The Legend of Zelda: Ocarina of Time 3D launched a few weeks ago, and before the end of the year, heavy hitters like Star Fox 64 3D, Super Mario 3D Land and Mario Kart 7 will be on store shelves.

Investors certainly hope the price cut will turn things around. In its first fiscal quarter, Nintendo saw its revenues drop by more than 50 percent compared to a year ago. It also reported a $328 million loss -- it's first ever quarterly loss. The company has further slashed its annual earnings expectations to 35 billion yen, it's lowest since 1985.

Not a bad deal. a new 3DS for 170 and people who paid $250 for it can get 20 free downloadable games. I might consider buying one now for $170

[EWB's Best Poster.]

I think the major issue with the system is that its best game they have for it is 13+ years old.

Additionally it sets a major precendent that ONLY remakes of popular titles will be available in order to help get sales going. Which it did, zeldas release boosted sales a fair bit. But thats one game.

Youll see. The line up is going to come out for the next quarter and theres going to be nothing but ports.

[ChrisSteeleAteMyHamster]

15,000 yen equates to about £75 in comparison to how much things cost here.

[apsham]

I think the major issue with the system is that its best game they have for it is 13+ years old.

Additionally it sets a major precendent that ONLY remakes of popular titles will be available in order to help get sales going. Which it did, zeldas release boosted sales a fair bit. But thats one game.

Youll see. The line up is going to come out for the next quarter and theres going to be nothing but ports.

Except new Mario and Mario Kart, along with that new Kid Icarus game have been dated.

[MalaCloudy Black]

http://blog.games.yahoo.com/blog/864-nintendo-ceo-takes-50-pay-cut-after-3ds-debacle

Global president and CEO Satoru Iwata announced Friday at a meeting with shareholders that he would be taking a 50 percent cut to his fixed salary as a show of responsibility for the dismal quarterly earnings and failure of the 3DS to catch on. In addition, members of the board of directors are taking a 30 percent pay cut, while other executives will see their paychecks cut by 20 percent.

Nintendo's stock fell to a six-year low yesterday following the announcement that it would cut the price of the 3DS handheld system from $250 to $170 just four months after introducing it to the market. In its first fiscal quarter, Nintendo saw its revenues drop by more than 50 percent compared to a year ago. It also reported a $328 million dollar loss.

Iwata -- and all of Nintendo's executives -- are far from the highest paid in the industry. Last year, Iwata received $1.8 million in compensation, a pittance compared to Activision-Blizzard CEO Bobby Kotick, who received $5.6 million in salary, stock options and bonuses last year (and currently holds $82 million in unexercised options, according to Forbes).

It's a startling move for American consumers, who are used to seeing greed and finger pointing from Wall Street CEOs who continue to award themselves massive bonuses even as their companies collapse. Japanese executives, though, work under a different philosophy, taking direct responsibility for shortfalls.

In the meeting, Iwata effectively fell on his sword for the 3DS's lagging performance, saying he felt a "very great responsibility" for the situation.

The price cut puts Nintendo in new territory, in that the 3DS hardware will actually lose money with each sale. That's fairly common for most consoles, but Nintendo has always sold its systems at a profit.

[apsham]

That's... quite admireable, wow.

[KevinStorm]

Damn. In the US if a company struggles like that, the CEO usually makes more money.

[EWB's Best Poster.]

Except new Mario and Mario Kart, along with that new Kid Icarus game have been dated.

Im hardly impressed by the idea of Nintendo using the word Mario to sell its gear. The fact its mentioned twice in the 3 examples you've given proves my point. And kid icarus? Does no one remember that this was a VERY SHITTY GAME when it came out? Then again, Im likely the only one old enough to remember and play it when it did first come out.

My problem with Nintendo stems from the fact they are using names alone to sell a product. Its not new. Super Mario Brothers 2 was a great example of how long they have been doing this. There are a few games that break out and dont need the old names to fall back on from the 80s. Prof layton being chief among them I would think. But are you going to see more break out exclusives like that or a rehashing of your 80s nostalgia? In your above example I think its clear which you are getting.

You've stated kid icarus as an example to prove my point wrong, but my point was in fact its remakes of old games that are going to be driving sales. They are selling on a name alone, and it kills unique games. Nintendo pushes out a lot of shovelware and then does 80s games for big sales. I'd like to see something more LIKE a prof layton keep coming out. New IP, new content.

[apsham]

Nope. You said that it would be nothing but ports - so I don't really care if you're impressed or not, as I've listed three games that aren't ports.

And using names to sell a product? That's what pretty much any company with as impressive of a back catalogue would and can and will continue to do until the end of time, it's a built in business model that is so easy to rely on it isn't even funny. And this is coming from someone who really isn't all that into the allure of Nintendo as I used to be. Any of the announced stuff that might have a chance to be a new IP.. well we can't really say much on that because it isn't out. In the meantime, more of what people enjoy is.. pretty much a good thing, and personally ports aren't that big of an issue simply because it's the younger generation who are the target demographics these days, and seeing my little cousin playing OOT and eventually Star Fox is going to be better than the tripe that he COULD in turn be playing. So far the 3DS hasn't been bad for announcements of shovelware.

[Sousa]

I for one am also worried that Kid Icarus being a meh game 25 years ago means it will be a meh game now.

[Skummy]

Im hardly impressed by the idea of Nintendo using the word Mario to sell its gear.

I too can barely conceive this shocking turn of events.

The problem with the 3DS is that people are unsure of it. Given time, the 3D element will be downplayed, much like most of the better games on the Wii barely rely on motion control any more, if they do at all. Ignoring the 3D, it's still an incredible piece of kit, and they could probably sell it better based on that than on 3D - 3D's a fad that'll die out, just like it always does, and people don't want to play a console that's going to make them feel queasy after half an hour.

Oh, and Mario being "rehashing of 80s nostalgia"? Did you miss when Super Mario Galaxy 2 was one of the best games ever made? Or when Nintendo's strength has always been its intellectual properties - Mario, Zelda, Pokémon, Kirby et al?

I don't get the Kid Icarus hype either - I didn't like the game first round - but for whatever reason people have been clamouring for a remake for the last few years, and amazingly, it's a completely different game now. Just because Kid Icarus was shit on the Game Boy doesn't mean that an entirely different Kid Icarus game on the 3DS will be.

[Sousa]

I suspect the Kid Icarus comeback is based on both Pit's appearance in Smash Bros. and ironic hipster nostalgia for Captain N-icarus.

Edited August 3, 2011 by Sousa

[Bobfoc]

Although I have no doubt that the impending Mario, Zelda, Mario Kart and Smash Bros. titles will be valuable sales boosters for the 3DS, I think it will ultimately be down to a few off-the-radar games carrying an element of mass market appeal that would really make it catch on. Super Smash Bros. Melee, Wind Waker, Super Mario Sunshine, Mario Kart: Double Dash and the first two Metroid Prime games all sold well on the Gamecube, but they weren't enough to prevent the console trailing behind the Playstation 2 and Xbox in terms of unit sales. The Wii and the DS, whilst being helped by the name power of its established franchises, both realised the difference between moderate success and huge profitability thanks to the releases of new IPs that drew in consumers who might not otherwise have entertained the idea of video gaming as a pastime, such as Wii Sports, Wii Fit and Just Dance on the Wii, along with Brain Training and Nintendogs on the DS. The basic gist of what I'm trying to say is that I don't think it will be the ports or the new versions of established franchises that will prove pivotal, but that it will be up to a few little titles that capture the public mood to really give the 3DS some momentum.