Can Mario and a price cut rescue the 3DS?

Analysts and retailers say yes, but questions remain over the future of traditional handheld gaming. Christopher Dring reports on the effect the price cut and new games could have.

Nintendo 3DS’ stuttering start had many in the trade worried.

The handheld began life with a bang, shifting some 113,000 units in the UK in its opening weekend. That made it Nintendo UK’s most successful hardware launch.

But even that was below expectations for both Nintendo as a company and the wider trade.

Why? According to industry analysts there are three reasons:

1. Multi-functional smartphones and tablets are becoming increasingly attractive for consumers.

2. The device’s average selling price is 200 – too high for many impulse buyers.

3. There has been no killer software.

In the background of a changing portable gaming market, 3DS comes out without the level of software catalogue required to launch a product. And the price was too high,” Parker Consulting’s Nick Parker tells MCV.

IHS Screen Digest’s head of games Piers Harding-Rolls agrees: If you bring something to market that is interesting but doesn’t have a huge catalogue of content that is really going to push it, then the pricing is exposed. A combination of not having the content and the pricing made it a challenge.

It’s a more competitive environment from numerous other markets such as smartphones and tablets that offer quality content.”

So the price has been dropped. Dramatically. By mid-August 3DS will have moved from expensive portable to a console with mass market potential.

THE PRICE IS RIGHT
It was a move Nintendo had to make. With retailers wary and third-party publishers looking to put its development resources behind other platforms, the platform holder needed to do something to regain trust and momentum. And that had to happen before the Q4 period and those big Mario games arrived.

Nintendo president Satoru Iwata told investors: Retailers decide the allocations of store shelves and which products to focus on for the year-end by looking at the results of the summer sales. Publishers are reviewing which development teams will work on which projects, and the results shall be launched next year and beyond.

Removing their concerns on 3DS sales will be critical for us to be able to enrich the applicable software in the years to come. In fact, after our announcement yesterday, Nintendo employees received positive feedback from retailers and publishers.”

That positive feedback has reached MCV’s ears. Retailers and publishers have welcomed the news. A new price point, coupled with Mario Kart 7 and Super Mario 3D Land, should ensure Nintendo hits its targets of 16m 3DS sold by the end of its financial year, with many of those sales coming this Q4.

Nintendo is a big Christmas performer,” Harding-Rolls adds. So you shouldn’t get too carried away by the 3DS performance from the last three months. You have to wait until the end of the year to get the full perspective. Until we get a good run of Nintendo content, we can’t discount the platform.”

Perhaps more significant than the price drop was Nintendo’s admission that it got it wrong. So sorry were the executives they even took a pay cut. Iwata slashed his salary by 50 per cent. Compare that to the UK banking bosses who pocketed millions despite their failures.

But Nintendo wasn’t just being self-deprecating. During an investor Q&A, Iwata discussed improving sales of eShop games – a far cry from the internet-shy Nintendo of the past.

What we are looking for from Nintendo is a more aggressive and developed online strategy,” Harding-Rolls adds. In this connected age they need to present something more robust.”

STIMULATINGSALES
So can a combination of Mario and a price cut rescue 3DS? All signs suggest that, in the short-term at least, yes. The two Mario games due this Christmas have blockbuster potential and are backed up by quality titles like Star Fox and Resident Evil. Nintendo is re-promoting the console on TV, giving retailers reasons to believe for bumper sales.

As for the long-term, the jury is still out. Smartphones are prevalent and it’s because of this that Parker and Harding-Rolls stick by the prediction that 3DS will not surpass the sales of the DS.

What Nintendo has done in terms of price is right and they have done it quickly,” concluded Parker. Mario Kart will do well on it.”

But you can get almost anything you want in terms of an entertainment experience on a smartphone these days. Those are a major threat to these devices.”

RETAIL RESPONSES

Igor Cipolletta, ShopTo
A hardware price cut is always good news for retailers. Plus, there is a great line-up of games from now to Christmas and the 3DS will definitely will be a must-have toy for Q4.”

Phil Moore,Grainger Games
We always expected3DS to be one of this Christmas’ must-have gifts. This price drop will bring the3DS to a wider audience, which can only be good news for our customers and the market in general.”

Sarah Jasper, The Hut Group
The Hut Group is extremely pleased with this development. 3DS is a fantastic machine, and a lower price will enable that positive word-of-mouth to spread further. This is sure to make it a must-have.”

Nick Sultanti, Morrisons
This is a positive and responsible step. The price drop will not only increase the penetration of this device to mass market but has now positioned itself and 3DS software into pole position for a great Q4.”

Andrew Thompson, Asda
It’s a welcome surprise. It’s been a challenging trading environment for the industry this summer, and this will give sales a much-needed lift. I see 3DS being a must have Christmas present.”

Neil Ashurst, GAME
The 3DS is an exceptional product and we think the price cut is exciting news for customers. We are committed to offering the best value possible through competitive pricing, trade-ins and offers.”

Gurdeep Hunjan, Sainsbury’s
Regardless of recent performance, we have belief that 3DS will be a great success this Christmas. The price cut doesn’t change our support for it, as we always intended to continue backing it.”

Tim Ellis, HMV
This is great news. It’s a significant drop and will give the format a much-needed shot in the arm. Good timing too, with the holidays underway – the new price makes it a more justifiable purchase for parents.”