The Nintendo Flop

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The Nintendo 3DS is the most shocking loss of the gaming industry. The falling sales figure of this device, that too very drastic, is Apple’s gain.

Among traditional video game companies, Nintendo is showing the most acute signs of pain from a wave of technologies on which games have become a central pastime, including Apple’s iPhone and iPad and social games on Facebook Inc.’s social network. Those technologies tend to attract a more casual gamer with mobile-game titles like Rovio Inc.’s “Angry Birds” and Facebook games like Zynga Inc.’s “FarmVille” and “CityVille.”

The company’s woes continued as its’ much touted new handheld, the 3DS fails to capture the market’s interest. Sales of the 3DS which lets users play games in 3-D have fallen short of expectations. The company reports that 830,000 people have bought the console in the U.S.since its release; it had expected to sell that many devices in just the first few weeks after release. Two weeks after the Nintendo 3DS was released in the U.S. back in March, Nintendo stock dropped at a 12-month low.

The 3DSs predecessor, the DS, was the best-selling handheld gaming device ever made, moving over 146 million units.

The decision to drop the 3DS’s price by about a third to $170 from $250 prompted an unusual expression of humility from Nintendo’s leader. In an online letter to customers, President Satoru Iwata wrote it was the first time that Nintendo had cut prices so deeply on a product within six months of its introduction. Mr. Iwata offered free software to those who purchased the 3DS at the higher price. “This may not be able to entirely erase feeling that, ‘I lost out because I bought early,’” he added.

Regardless of how the response has been, theres no denying the fact that Nintendo had taken a questionable path in promoting and selling its latest handheld. The company launched the 3DS with a very low-key marketing campaign. It released the system without a single game people wanted to own. It also charged more for the system than any other Nintendo handheld.

While games for Nintendo’s 3DS typically sell for $30 to $40 each, mobile and social games are often $1 to $5, or even free, supported by advertising and the sale of “virtual goods” within the games. Games for those newer technologies are instantly available for download, saving people a trip to the store to buy cartridges, like those for the 3DS.

Nintendo, known for game characters like Mario and Zeldahas had problems before when new, more capable game hardware has emerged from traditional rivals likeSonyCorp. andMicrosoftCorp. Now Nintendo is competing in a much broader market where any device with a screen and Internet connection is a gaming device.

Nintendo DS sales in the Middle East and Africa as of March this year surpassed 63,000 units.

Sources: WSJ, Blogs.forbes, ibtimes, gameinformer

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