The 3DS isn't really selling at a loss. Everyone just seems to be repeating a misleading headline from Andriansang. The original article just talked about Nintendo adjusting their revenue forecasts down to account for the new pricing. It didn't say the hardware wasn't profitable at the new price, just that since they aren't changing their projected unit sales, at the new price they will be taking in far less revenue.
Nintendo 3DS business/general talk *spin-off feat. 3DS as a P.I. in New Orleans
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http://forum.beyond3d.com/showpost.php?p=1569866&postcount=552
That may not be true. I for one find it really hard to believe the console is selling at a loss at 160€.
I generally agree with you, there seems to be no fixed formula on how to stay on top. Trends are near impossible to predict and they either hit or miss.
The 3DS does seem to be Nintendo's biggest flop in handhelds, though.
Given the 3DS' very weak hardware, I thought their best chance at getting a decent userbase would be during their first year, where smartphones are still somewhat equiparable.
Once ~150€ smartphones hit the market with larger stereoscopic, higher-resolution screens, 5x the graphics power and an exploding games library in Android (2013-14?), the analog nub and dedicated buttons won't be enough to save the console.
Right now, in my country, we can get an Ideos X5 (MSM7230, Snapdragon 2nd-gen + Adreno 205, 800*480 3.7" capacitive screen) for as little as 150€. One can only wonder what the same amount will get us in 2 years.
tongue_of_colicab
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I'm sure people that want to play mobile mario, zelda, ff, etc are very interrested in a 500 euro tablet so they can play angry birds... Will people ever stop saying that? It just isn't true. If you want decent mobile gaming your not going to be playing on a smarthphone or tablet. Fact.
Anyway, didn't the DS sell pretty slow too at launch?
They main problem, as always, is games. Nobody is going to buy a gaming system with no decent games on it.
Perhaps, but that means Nintendo launched with incredible profit margins on their hardware. I'd place the upcoming price as around break-even if not loss-leading, given BOM, marketing, distribution, etc.
You're assuming everyone who gamed on a Nintendo handheld bought it for these games, rather than just some games. If it was only portable games people wanted, and not any franchises in particular, then whatever the consoles plays won't attract the custom. Sure, there'll be some Nintendo franchise fans who will buy Nintendo's console to play Nintendo's games, but there'll be a significant portion of the population with no particular affiliations. Also this isn't just about mobile gaming, but portable devices. iPad is just plain cool. Chances are lots of people who's want a 3DS would also want an iPad, and if it's a choice between one or other, iPad has the momentum at the moment. There's scope for interest in mobile gaming to fizzle out as the only mobile electronics pastime, and people to fill in their mobile moments with web browsing, social networking, watching TV/movies, etc. Even if these extra activities only make up a part of mobile use, and games occupy a large part, a device that can serve all purposes instead of just the main one is still going to offer a more flexible experience.
To reiterate, it's not about choosing a device for gaming on the go. for some it's that. For others, the handheld was a portable pastime. Now the portable pastime isn't limited to games, and the devices on offer aren't just handheld games devices. Smart phones and pads are offering alternatives competing for the same proportion of people's income.
Unproven. At least, that the problem is games. Could be that people are wanting to save their pennies to get a pad or smart phone instead of shell out on a handheld. There's no way to prove or disprove this yet, but long term we'll see the interest in handheld games devices dwindle if so. My reckoning is that there'll be a handheld gaming market still but smaller than previous mobile markets, and only wanting cheaper devices. A $150 handheld might sell, but anything more expensive is going to struggle with smart devices. This 3DS price reduction, a third off in 3 months of launch, shows Nintendo guessed wrongly at what people would be willing to spend on a dedicated gaming device.
Well, I've been using various stereoscopic 3D displays since 1987, so I just tend to see the rest of the world as being really slow in catching up.
Seriously, the autostereoscopic display is the only reason I'm interested at all, frankly I regard the entire market segment as pretty much obsolete.
Let me explain clearer - what I meant was that it's easy to criticize the 3DS for shortcomings where it is easy to perform the thought experiment: "Well if it had dual 400MHz processors instead, just how much more would it sell?" Or 4.5 inch screen. Or twice the pixels. Or...
As opposed to the binaries such as "Backwards compatible or not" or "Autostereoscopic 3D or not" or "dual or single screen".
So if the 3DS had twice the graphics power which has been criticized on B3D forums, how much would that have really helped sales? Would it have sold 30% better? 100%? 500%? 5%?
Difficult to say, I know as a smartphone whore, there it's all about bigger and badder screens currently. Once people winced at 4.3" as too big. Now they're the norm and any flagship phone sporting less would be considered deficient. And now that it's the norm, the new "beasts" are the upcoming 4.5" ers. I've even heard of a 5.3" coming. Of course it has to stop somewhere, but my guess is at least 4.7", possibly something like 5", may be that ultimate stopping point for phones (with great bezel management, thin and light design, etc).
So coming from that realm, the 3.5 screen on the 3DS just sounds puny.
If you think 3DS failure is about specs though, we have a test case that will tell us very soon, it's called the PS Vita. If the Vita doesnt do very well either, we can say it wasn't about specs. If the Vita does really well, then maybe it was about specs, big screen, etc. This seems dubious though because if it was about the best specs the PSP seemingly would have done better. The biggest major difference between PSP and Vita imo is dual analog sticks.
And I'm a person that believes specs are pretty much the most important factor in console battles. However it's proven not to be the case in the handheld market, so far. Because I was a guy absolutely SURE PSP would crush DS, and look what happened.
My current operating theory is accepting the conventional wisdom that phones and tablets have eaten away the dedicated game handheld market. In that case Vita wont make any long term blip any more than 3DS did. But, we shall see.
Too me I dont think it's about price. But maybe if 3DS just explodes from here on out, I was wrong. But i just dont really see how if the demand isn't there at 250, somehow there will be huge demand at 170. That just doesn't wash. In a lot of ways I dont even see a huge psychological difference between certain price points. The difference between 299 and 249 is almost nonexistent in real terms to me, as pertains to game hardware. I think, 129 is a big difference. 169 is still a lot. To me 170 and 249 are both "around 200 dollars" or something like that. Not saying lower isnt better, but it just doesnt seem earth shattering to me, both are still a lot of money for a gadget.
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Deleted member 13524
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I can't say this enough:
- 2005-2011 winning formula != 2011-2016 winning formula.
Many major hardware/ecossystem choices are only found out to be right or wrong after they've been tried.
To put it simply, it's a dog's world.
Personally, I felt that one of the major issues with the 3DS is that comes off as just a tacked on feature to a current portable. I think Nintendo should of created a new and future forward form factor and branded it with a new name instead of sticking a "3" on the front of "DS".
I remember discovering a 3ds kiosk by mistake because it looked like a regular ds. I only recognized it when my 4 year son stopped to pick it up. But even then I wasn't really impressed. I came away with the impression that its just a ds with an extra novelty.
Imagine if Sony's next gen console was just a PS3 with an appreciable but not drastic uptick in hardware, 3D enabled (hypothecially act as if the 3D is a missing feature on the PS3), all in the same form factor and simply rebranded as the PS3D. I can't imagine many seeing this as a newer generation product but simply as the same old console with tack on features.
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More like history often shows that missteps and misjudgements in the gaming market are often the result of arrogance overcoming simple rational logic.
It takes some "luck" to get right but those that do get it right often turn around and do a alot "dumb" to muck it all up.
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Third reason is we know PS Vita will be released later this year at $250 and our 3DS will not be able to compete even with a price drop so we decided to lose face now instead of losing face against a competitor later giving them good publicity. In the eye of the consumer it is better to give the perception that we forfeited instead of being beat...
The burning question I have is, 'if they had released a 3DS with hardware more befitting of a $250 price point would they had to have made this same price cut?'
My personal impression is that the 3D makes the graphics seem quite jarringly poor in overall image quality. The instant you start playing 3D games on a system you start to compare it to other 3D games you experienced. I felt the same way about the Wii losing steam although it seemed to take a little longer. I feel Nintendo has had a bad habit in recent years of releasing too underwhelming hardware relative to the market at large almost as if they are rebelling against the Sony model of trying to produce overwhelming hardware for a specific price point.
I remember talk from Iwata that they considered Apple to be their biggest competitor. How can a company president make that statement then come out with the 3DS?
My personal impression is that the 3D makes the graphics seem quite jarringly poor in overall image quality. The instant you start playing 3D games on a system you start to compare it to other 3D games you experienced. I felt the same way about the Wii losing steam although it seemed to take a little longer. I feel Nintendo has had a bad habit in recent years of releasing too underwhelming hardware relative to the market at large almost as if they are rebelling against the Sony model of trying to produce overwhelming hardware for a specific price point.
I remember talk from Iwata that they considered Apple to be their biggest competitor. How can a company president make that statement then come out with the 3DS?
It's not Adriansang saying the 3DS will be sold at a loss, it's Bloomberg Japan, just after the conference.
Which is to say, it's almost certainly true.
To reconcile this with stuff like iSupply BOM estimations, you need to appreciate that there is one hell of a lot of costs that aren't included there. Which the people those estimations are meant for are well aware of, of course.
It actually makes perfect sense. Nintendo is trying hard to avoid competing directly with Apple, as opposed to taking them on head on which would have been an impossible task for them. Everything from formfactor, strong DS connection, 3D of course, no tele data capability and so on, differentiates them from Apple. They are trying to carve their own niche, which to me seems wise. Remains to be seen how successful they'll be.
For perspective, last quarter Apple sold roughly 50 times more iOS devices than Nintendo sold 3DSs.(!) In order to judge if Nintendos strategy is sound, there are effectively two yardsticks as far as I can see from a business perspective - overall profitability of the product (1), and comparison of market penetration relative to its predecessor (2), with (1) being by far the most relevant metric. In a direct comparison vs smartphones, it is already abundantly clear that handheld game consoles are relegated to niche status.
I am surprised it's not profitable at 169 tbh. As low end as the chipset is. I guess 3D screens are expensive?
If thats the case then why are they releasing the Wii U which promises many of the same things which are already or will soon be possible on the iPad? I don't think a successful or wise strategy is to do the opposite of another competitor where-ever possible. I also don't think they are deploying such a strategy either.
I think the real answer is that they are stuck in an extremely conservative position in trying to preserve the past with a design which harks back to the old GBA and GB line of handhelds and trying to compete against relatively more modern clean sheet designs from Sony and especially Apple and their imitators. The world is moving on and Nintendo is offering *just* gaming machines when their competitors offer so much more. They talked about disrupting the market with the Wii but the 3DS makes them look like they're counting down the days until someone else takes their lunch away.
I went to the original Bloomberg Japan article. I couldn't find anything that said the hardware wasn't profitable, admittedly using machine translation. All the article is talking about is revenue revisions. This got interpreted as "Nintendo now taking a loss on 3DS hardware" in Andriansang's headline which is what every other English publication has referenced since. I don't doubt Anoop's translation, just his understanding of the financial data.
It was already stated. Nintendo had though designs laid out before the Ipad was even anounced. The bases of the design for the Wii U controller was the NDS, ie, multi screen play. The similarities with the Ipad were coincidental because if you wanted to get techinial, Nintedo arlead had that general design out before Apple "with" the DS.
Nintendo has made it clear that they are not trying to compete aggressively which is why the Wii was specced independent of other consoles.
3D screens are expensive because I;ve been trying to get a one myself to play 3D games on and I've yet to see one ,even on ebay, that drops below $120. Using that small uncommon tech with the two cameras added to the mix is not something I see as being cheap.
The tech the 3DS uses is completely different from what 3D monitors use. Those have to be 120hz displays. They're also much larger which, in LCD production, makes them much more expensive. The 3DS is a bog standard, commodity 60hz LCD with a parallax barrier layer pasted on top. That uses monochrome vertical LCD stripes that either are or aren't on, arranged at the right alignment and depth. It's a novel use of fairly old tech. I think the most difficult part is making sure the barrier layer isn't crooked.
I don't agree that the Wii U and the iPad overlap much. Other than that, I agree that Nintendo is firmly grounded/conservative, and reluctant to play the "media hub" game. In contrast to you however, I believe that keeping focus on their core competence is a way to both keep costs down and to ensure that they can claim a profitable niche for themselves, even though that particular niche is shrinking. They have proven capable of opening up new streams of revenue before, which is probably a much better bet than trying to fight a battle they are destined to loose.
Third reason is we know PS Vita will be released later this year at $250 and our 3DS will not be able to compete even with a price drop so we decided to lose face now instead of losing face against a competitor later giving them good publicity. In the eye of the consumer it is better to give the perception that we forfeited instead of being beat...
You think PS Vita will fly off the shelves ? I reckon it'll suffer the same as 3DS at $250. Sony needs to drop Vita price fast.
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