Weekend Reading: Nintendo and Its 3DS Crisis

Nintendo launched the 3DS handheld console in February for the Japanese market and in March for the North American and European ones, setting a pretty steep $250 price tag. Now, as we saw earlier this week, the Japanese company has slashed over a third of that price, making the portable device available for $169.99.

While this will certainly drive up sales for the 3DS, this move hints at the desperate times Nintendo finds itself in and sets a grim precedent for next year's launch of the Wii U home console.

A couple of years ago, Nintendo seemed to be incapable of failing, as the Wii was trumping its rivals, the PlayStation 3 and Xbox 360, despite not even having HD support or quality graphics, while the DS, in all of its iterations, was humiliating the Sony's PSP and still showing crowds that phones can't offer the same portable gaming experience. All of the devices were effectively printing money, as the price of Nintendo stocks grew and grew.

Now, however, looking back, you can see just how quickly things went bad for the Japanese company.

At first, the phenomenal sales of the Wii were beginning to slow down, while the PS3, fresh from a price cut, and the Xbox 360, with changed looks and a lower price, started picking up steam. The DS was still going strong, but the hardware was beginning to show its age, while smartphones and tablets were slowly starting to offer great gaming experiences, with the likes of Angry Birds, Cut the Rope or Infinity Blade becoming success stories.

Nintendo was faced with a choice, either release a more powerful DS and try to fend off the growing threat of mobile phones, or risk it all on a make of break feature, the glasses-free 3D, which was being hailed by other industries, like cinema, as the next big thing.

Nintendo gambled, showcasing the 3DS, not that different from the DS in terms of looks but with an autostereoscopic screen, and priced it quite high, hoping that customers will be hooked on the experience and make it the same great success as the DS before it.

That didn't happen, as few people understood the 3DS and its features, seeing in it just an overpriced DS with a screen that caused headaches and eye strain.

Nintendo's sales figures emphasized this failure, so, in order to save face and at least turn a profit this upcoming holiday season, the price cut was made. Alongside it, 20 free downloadable games will be given to existing 3DS owners, via the platform's eShop.

This highlights the new strategy cooked up by Nintendo for the 3DS, which is no longer a 3D-enabled gaming platform, but one geared towards downloading games from previous Nintendo platforms (NES, GB) and using different services, like Netflix.

Sadly, Nintendo is a bit late to the party, as many of these things are already achieved by smartphones, whether iOS or Android ones, and in a much easier to use way.

This holiday season, we'll see a Nintendo in big trouble, and, if 3DS doesn't manage to attract crowds, then the launch of the Wii U is going to be seriously affected, as the company will delay it in order to make sure that it won't repeat the same mistakes as with the 3DS.

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