The future of Nintendo hand held gaming devices hinges on their recent decision to slash the price on their recently launched 3-D hand-held gaming device which has initally been rejected by consumers.
The future of Nintendo hand held gaming devices hinges on their recent decision to slash the price on their recently launched 3-D hand-held gaming device which has initally been rejected by consumers.
The 40% price cut which comes into effect this month is vital as Sony will shortly launch their new Playstation Vita in direct competition with the Nintendo offering.
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“If this price cut doesn’t work, there’s not much more they can do,” Macquarie Securities analyst David Gibson told the Wall Street Journal.
The decision to slash the price by 40% follows a miscalculation on the machine’s appeal.
Under competition from games played on Smartphones and a new generation of tablets, Nintendo has cut prices on new products before, though never as deeply as 40%.
The WSJ said that fter taking several years to develop a new product, a game-device maker relies on its latest machine to set off a cycle of growth, with popular games released for the new device enhancing the hardware’s appeal. But Nintendo hasn’t seen that happen with the 3DS, the first hand-held device to play 3-D videogames without the need for special glasses.
After selling 3.61 million 3DS devices globally from its Feb. 26 launch through March, Nintendo sold only 710,000 units in the entire quarter ended June 30. Analysts said Nintendo is unlikely to reach its 3DS sales target of 16 million units for the fiscal year through next March.
As a result of the slump Hiroshi Kamide, a research analyst at J.P. Morgan in Tokyo dropped his investment rating on Nintendo’s stock to “underweight” from “overweight” after the July 28 announcement of the price cut and estimated that the 3DS hardware would generate a loss of US$1.3 billion in the current fiscal year.
