A dwindling demand—
Many kids growing up in the 90s remember the beloved Nintendo Game Boy and all the hours of fun spent with the handheld video game machine. It had no color, the graphics were chunky, and the games were simple, but it had a charm all its own and became a monster hit for Nintendo.
But the latest line of handheld game console from Nintendo, the 3DS, has failed to inspire strong sales numbers and interest and has contributed to Nintendo’s first annual loss in fifty years totaling $530 million dollars.
They saw and they left
Nintendo’s new technology for the 3DS allows gamers to view 3D graphics, which literally jumps off the screen, without the use of special glasses such as those used for viewing 3D movies. The initial price of the machine was $249 with individual games costing up to $40 a piece.
But the bottom fell out for 3DS sales as it became apparent that gamers were no longer interested in spending another $249 for another new machine. The price of the 3DS was dropped to $169 only after a few months after its launch but demand for the machine never approached the popularity of previous models.
Too much greed?
A slew of new handheld game machines were rolling off Nintendo presses at an amazing rate from 2001 till the present starting with the Game Boy Color, Game Boy Advance, the many models of the DS, and finally the 3DS. Consumers were constantly placed in a position of owning obsolete tech.
The last straw seemed to be the 3DS with its limited selection of games titles at launch and the commitment of another $249 investment for the latest technology.
Another factor contributing to Nintendo’s first annual loss was the emergence of mobile phones as the preferred way of playing games on the go. The extremely low cost of the games, many which are priced at only 99 cents, was a formidable opponent against Nintendo games costing 20 to 40 times more.
A reversal of fortune
Nintendo, which was once considered an unstoppable juggernaut in the video game industry, is hoping to turn its fortunes around with the release of its newest full-sized game console, the Wii U, which features tablet-like touch screen game controllers. However some industry analysts believe that Nintendo may be caught in a rut.
Satoru Kikuchi, a Tokyo-based analyst at Deutsche Bank said:
“At the moment, we cannot see anything really new. Since the DS and Wii we have just had more installments of Mario.”
However, it should be noted that many industry watchers were also skeptical and antagonistic towards the Nintendo Wii when it first launched in 2006. It went on to become one of the most successful video game consoles ever launched and has sold almost 96 million units worldwide.
Via Financial Times
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Written by: Frank Ling on Thursday, April 26, 2012 – 10:58 AM