3DS Price Cut Means Nintendo Selling System at a Loss

For the first time in the company’s history, Nintendo will be selling a handheld system at a price point that incurs a loss for every system sold. That’s right: the 3DS’s new lower price point doesn’t cover the manufacturing and distribution costs. This means Nintendo’s banking on strong software sales this holiday season and in the coming years in order to help boost their fiscal performance and shouldering the burden of lower hardware costs to drive the install base so this hope can actually come to fruition.

How did a handheld that the entire industry adored so poorly underperform in its early life? Sounds to me like Nintendo misread the industry enthusiasm for the system as a sign of consumer excitement, and projected the 3DS price point a bit too high as a result. I’m sure the rumors that the 3DS can be bad for your eyes and the lack of strong first party software in the early months didn’t help either.

We saw a similar struggle with the DS in its early months, but it wasn’t nearly so bad as to prompt slashing the price by a third and New Super Mario Bros. quickly picked up the system and rocketed it to heaven. Can Super Mario 3D Land give the system a similar boost? Hard to say, since Super Mario Bros. is a tried-and-tested formula while the hybrid game we’re seeing on 3DS is a bit more of a wildcard. Mario Kart 7 is a safer bet, but it’s equally hard to say whether current DS owners will see it as a necessary enough upgrade to warrant picking up a 3DS. Having the 3DS priced at about what a DSi is now should help, but will it help enough?

Source: Andriasang