ShareThis
By most reasonable standards, it’s been a difficult year financially for Nintendo. The company has continued to see operating losses amid sluggish sales. The 2DS / 3DS line has seen steadily declining numbers over last year and is not expected to come close to what Nintendo had hoped for when the year began. Wii U sales have shown gradual improvement, but they still remain low compared to their current-gen counterparts in Xbox One and PlayStation 4.
In my view, the 2DS / 3DS decline is the more unsettling of the two Nintendo offerings. The company has had its problems in the past with home consoles (i.e. Nintendo 64, GameCube) but if there was one thing we could always count on, it was death, taxes, and a highly lucrative Nintendo handheld business.
So what’s the story? There are many angles to this, but I think two of the biggest relate to both Nintendo’s decisions and the changing nature of the handheld market.
Nintendo’s Divergence
Nintendo has never been afraid to unleash technology that appears, on its face, niche or quirky. It is this engine of innovation that got it where it is today, whether it was the elegantly simple d-pad on NES, the mind-shifting touch and dual-screen elements of Nintendo DS, or the marvel known as the Wii Remote. Oftentimes those changes translate into commercial and critical success for Nintendo. Occasionally, in the case of Virtual Boy, they do not.
3DS is by no means a Virtual Boy, but it is clear that 3D has not caught flame the way Nintendo expected it to. One reason may be that there is a portion of the population that cannot see 3D, either because of visual disability, namely stereoblindness, or because of maladies like eyestrain or headaches. (I am part of the 5-15 percent of the population who cannot visually see in 3D.) Another reason may lie in the general ebb and flow of 3D as a home technology– 3D TVs, for example, have taken a back seat to 4K TVs. Still another may be that 3D may not necessarily make enough of a difference in the game experience for some users. Although Nintendo has not given up on 3D altogether, the release of 2DS signals that Nintendo is aware of the limits of 3D as a selling point.
I have to wonder, too, if Nintendo’s attempt to adapt with 2DS set in motion a chain reaction of good intentions that may actually be harmful to the cause. As of the time of this writing, there are some five different 3DS iterations either on the market or headed to market: 3DS, 3DS XL, 2DS, New Nintendo 3DS, and New Nintendo 3DS XL. The three clusters of products– 3DS, 2DS, and New 3DS– aren’t just wrinkles on the 3DS model; they are fundamentally different machines.
The New 3DS, in particular, is essentially an upgraded system with a new CPU and a tweaked control interface that will play host to a new line of higher-powered games. Those new games, including a port of Xenoblade Chronicles, will not be backwards compatible with the older 3DS or 2DS. That Nintendo has fundamentally changed the hardware just two years out, with the prospect of games not supported for early adopters, is highly unusual in a gaming machine sector that tends to operate more on four- and five-year life cycles. This is very different than the incremental improvements in the Game Boy Advance SP or the DSi.
Ultimately, the New DS approach risks sending a mixed and potentially dispiriting message to consumers. Early adopters are told that their machine is soon to be obsolete; prospective owners may wonder just what Nintendo is trying to do. The lack of a clear vision may also serve as a deterrent to developers, who now have to decide if they want to make games for a new 3DS model with different specs (which early adopters can’t play) or games that play on the original 3DS (which later adopters do not benefit from over the original model). The last thing anyone wants is poor third-party support.
The Industry’s Convergence
3DS is the undisputed kingpin of handhelds. Sony has Vita, but 3DS has outsold it by more than a 4:1 margin. As we all know, Sony is not the real competitor for Nintendo in this day and age. The real competitor for Nintendo is smartphones.
This is not a news flash for most people, but considering the why helps to illuminate Nintendo’s current and future challenges. In the last console generation we witnessed a trend toward convergence among hardware developers. Specifically, Microsoft and Sony sought to make their systems not just gaming rigs, but one-stop media centers– Swiss Army knives of technology, if you will. Xbox 360 and PlayStation 3 could not only play games, but play movies (including Blu-ray on PS3) and stream seemingly every online streaming service out there, among other bells and whistles. Wii, to its credit, was also able to stream some of those services, too, and was at one point one of the most used devices for Netflix.
Smartphones have essentially taken that mantle of convergence— of being Swiss Army knives of technology— in the portable space. A top-shelf Android or iOS smartphone can talk, text, surf, stream, and play a litany of games that compete pretty favorably with dedicated handhelds. We’re not talking about Nokia N-Gages here; we’re talking about full-functioning systems with a burgeoning library of games, some of which are free, most of which are at least cheap, and more than a few that actually have some depth.
At this point I still think 3DS still offers deeper gaming experiences and a superior interface, but the gap is narrowing. And with smartphones costing a fair sum of money, either on the phone or the service (or sometimes both) fewer people may be unable or unwilling to spend the additional cost on a specialized gaming handheld.
So What Should Nintendo Do?
If I had an easy answer to that, I’d be rich. The die is already cast on the New 3DS, so Nintendo will simply have to wait and see how that pans out. Down the road, I don’t know. Ultimately, with any piece of technology Nintendo has to convince consumers that its offerings are must-have and deliver something compelling that cannot be found anywhere else.
My guess, and my hope, is that Nintendo’s salvation may yet come from the same innovation that has kept the company going in past generations. Nintendo has shown a talent for being disruptive in the gaming market, and it will have to find ways to do so again. If it can, it can turn loss into profit. Whether that will happen in the 3DS era remains to be seen.
