Why the 3DS Will Win, Not Die

First blog post in a while! I’m going to try to blog more. Anyway:

People are calling the 3DS dead. I’m very, very skeptical.

I bought a 3DS for $170 recently. My old DS (which is my all-time favorite system) broke a while ago and I finally got around to replacing it. Why a 3DS and not a Lite? Because I know that, like the DS, there’s a strong lineup to come.

Right now, the 3DS is where the DS was at launch. It’s got a price point of $170 (the DS was, what, $150 at launch?) and its biggest title is a remake of a critically-acclaimed N64 title.

Sure, the DS sold like hotcakes at launch, but that’s because it was a Black Friday launch window. The 3DS has yet to see a holiday season, and plus, they’ve got some AAA titles (Mario, Mario Kart) for the holiday window. The only reason they would do a price drop AND a redesign before the first holiday window is if they were really really scared of the Vita, and they have no reason to be.

Nintendo historically sucks at doing launch windows. They really really do. But they’re in it for the long haul. They always have been. It was months before the DS (or the GBA, or the GameCube, or the N64, or any of Nintendo’s other systems) had many titles worth talking about. But the titles eventually came and didn’t stop coming. Nintendo’s handhelds have what their consoles (and their competition) currently don’t: strong third party support with AAA titles for both mass market and the hardcore audience. (Read: Pokémon.)

The 3DS is the new PS3. Absolutely horrible launch window, massively overpriced at the start, but with a good price drop and some time to build up a decent library, suddenly it becomes a strong contender. And unlike the PS3, they’re not competing with the 360: a system that had a head start, killer app exclusives, and goes toe-to-toe with the PS3 in regards to third-party support. The 3DS won’t just have AAA titles, it’ll have AAA exclusives.

Nintendo is currently selling the 3DS as a loss leader, and they’re doing a lot of value-added stuff (Pokédex 3D, Nintendo Video, Four Swords coming up, Flipnote coming up, the promise of free DLC and apps via SpotPass, etc). Unlike MS and Sony, Nintendo historically does not do that, and I’m thinking that they’re confident that they will, at some point, have a strong AAA lineup. They have to, or else they won’t make money.

Much like the PSP, I don’t see the Vita as serious competition due to high price point and lack of third party titles. Come holiday season, the parents are going to be choosing between a 3DS at $170 versus a Vita at $250 or $300. Mario and Pokémon sell more systems than Uncharted and Gran Turismo, and that’s a fact.

While iOS and Android are becoming bigger and bigger in the gaming space, I don’t see them posing serious competition to the 3DS. This is because of poor controls, lack of AAA titles, and, most importantly, the Parents Factor. Your average parent isn’t going to see the 3DS and the iPod touch as being in the same class of device. They’re going to buy their kids (especially younger ones) 3DSes. (Incidentally, the Parents Factor is going to be the thing that kills the Vita as well, much like it did the PSP.)

The one area I see Nintendo struggling in the face of iOS/Android is in the non-gamer market, a market where Nintendo used to have a complete lock. Parents are going to buy the 3DS, yes, but they’re going to buy it for their kids. Nintendogs, Brain Age and Wii Sports may have helped push systems back before the iPhone became big, but now, a parent isn’t going to plunk $170 on a 3DS and $30 a pop on games for themselves if they can play Angry Birds for a buck on an iPhone they already have. Especially if they got bored with Nintendogs, Brain Age and Wii Sports the first time around. (This won’t stop them from buying them for their kids, of course.)

Nintendo needs to abandon their Blue Ocean strategy, because it’s dead. Blue Ocean sold Wiis and DSes, but it’s not selling 3DSes or Wii Us (or Kinects). The retention just isn’t there. Consoles and dedicated handhelds are no longer the dominant force in casual gaming, smartphones are. In addition, if Nintendo wants to sell loss leaders, they have to take into account that the casual crowd who bought Wiis just to play Wii Sports, or DSes just to play Nintendogs, simply aren’t buying many other games. It’s games, not systems, where Nintendo makes money.

Nintendo saw their mistake, they saw the challenge that the Vita proposed, and they threw a Hail Mary. When the Vita was announced at a similar price point to the 3DS, Nintendo needed to respond, and respond they did. They want (need) to get as many 3DSes into the hands of gamers as possible, so that when we do get a slow trickle of AAA titles, they’ll sell. And they still have one more trick up their sleeve…

When Nintendo dropped the 3DS price to $170, they pointed a gun at the Vita’s forehead. When Pokémon launches on the 3DS, that gun goes off.

TL:DR: Nintendo has this generation in the bag.