Nintendo: Keys to Sustaining 3DS Momentum in 2012To say Nintendo had a strange 2011 would be a colossal understatement. Following dominant years with Wii and DS, the company kicked things off in March with 3DS, the impressive handheld with glasses free 3D, only to fall short of its one-month sales target of four million units. This ultimately led to an uncomfortable series of events that resulted in a surprisingly low stock price currently hovering around the $17 range, President Satoru Iwata taking a pay cut and a price drop from $249.99 to a more reasonable $169.99.
This was more than enough to motivate critics to bash the publisher for being out of touch with its target audience, while shareholders and analysts suggested the big N release games for the iPhone and iPad.
Then, things dramatically turned around. The system received a natural sales boost due to the reduced price cut in August, and then came the games, critically acclaimed titles like Star Fox 64 3D, Tetris: Axis and heavy hitters Super Mario 3D Land and Mario Kart 7, those last two released within weeks of each other.
The result? 3DS beat first year sales of DS in just eight months, while both Mario games quickly became two of the platform’s best sellers.
Japanese consumer support also received a boost, thanks in large part to Capcom’s Monster Hunter Tri G, which sold 471,055 units in just two days. To date, over one million copies have been shipped.
Even the 3DS eShop hit its stride, as Nintendo delivered the outstanding and brand new puzzle effort, Pushmo, as well as Game Boy classics Super Mario Land 2: 6 Golden Coins and Metroid II: Return of Samus, while on the third party side, developer WayForward contributed the entertaining Mighty Switch Force just before the New Year.
Suffice it to say, Mario and Co. have tremendous momentum heading into 2012, and it’s of key importance to not only maintain it, but also achieve even higher goals. After all, App Store support shows no signs of slowing down, and with Sony’s PlayStation Vita debuting February 22 in the U.S. and Europe (the machine just hit Japan December 17, with sales in excess of 321,000 units sold within the first two days), Nintendo can ill afford to stumble and give up significant ground to the competition.
“All Nintendo has to do is provide software support,” said Wedbush Securities analyst Michael Pachter. “Its already announced lineup is stellar, but we don't have dates. It would help immensely if they would get a few out in February or March.”
This is cause for concern, as Nintendo does not have a major first party retail release in January or February. Capcom will bring its highly anticipated (and M-rated) survival horror adventure, Resident Evil: Revelations, which arrives in Europe and North America on January 27 and February 7, respectively.
That, however, won’t satisfy younger gamers. Instead, they’ll have to make due with Sega’s Mario & Sonic at the London 2012 Olympic Games. On the positive side, the game features Nintendo’s mascot, but it remains to be seen whether this handheld sports title will be any good.
With this in mind, and barring some surprise announcement, we’ll have to wait until March 23 for a 3DS retail game from Nintendo, the promising Kid Icarus: Uprising. That said, there’s no guarantee the Kid Icarus IP has the same sales chops as Mario and Pokemon.
“The perception of a full and constant software pipeline will stoke interest in hardware going forward,” said Billy Pidgeon, senior analyst at M2 Research. “The Legend of Zelda: Ocarina of Time 3D, Super Mario 3D Land and Mario Kart 7 are a great start and will continue to sell along with new 3DS hardware. But to keep the base growing and to sell more software, Nintendo needs to release more titles of this caliber at regular intervals.
GoNintendo’s Kevin Cassidy agrees.
“Software is always going to be king. Nintendo can't just talk about games they have in development,” he said. “We need to see a steady stream of quality software, and that counts for third parties as well. If the software is always coming down the pipeline rather than hitting store shelves, momentum is sure to drop.”
To that end, we know the company has plenty of heavy hitters on the way, in the form of Paper Mario 3DS, Animal Crossing 3DS and Luigi’s Mansion 2. Again, we just need dates, and it behooves the publisher to release these potential blockbusters sooner than later.
“Nintendo should also continue to improve online interactivity with more and better paid downloadable software,” Pidgeon continued.
The company has seemingly done just that to better position the eShop in 2012. In Q1, fans can expect 3D Classics: Kid Icarus, Nintendo’s new Dillon’s Rolling Western and Sakura Samurai: Art of the Sword, along with surprise retro games from the company’s extensive library.
Ultimately, though, the steady stream of retail support is of the utmost importance, particularly games that involve Nintendo’s biggest franchises. No longer can it afford software droughts, particularly when it comes to Mario and Pokemon. There always need to be games for those respective properties on the way.
In addition, 3DS must evolve. We already know the company hopes to achieve dual stick control with the Circle Pad Pro peripheral, which already works with Monster Hunter Tri G in Japan, and will also support Resident Evil: Revelations. There has to be a redesigned system in development, and if hardware sales dip, we may hear and see it by E3 2012.
On that note, the developers must enhance 3DS in other ways. Quality of the cameras should improve, given the fact that smartphones and PlayStation Vita take higher resolution photos. Not only that, but Nintendo must explore online connectivity.
“Mario Kart 7's multiplayer modes are a great start,” said Pidgeon, “but Nintendo developers should build on that.”
As it turns out, the biggest online 3DS experiment may come from Square Enix’s action RPG, Heroes of Ruin, releasing next spring. Not only will it feature daily challenges through SpotPass, but also four player online co-op, as gamers team up to raid dungeons, slaughtering enemies and collecting loot. This title’s overall quality and consumer reception may play a huge role in the portable’s online future.
Taking all of this into account, we expect great things from Nintendo in 2012, with 3DS serving as a low cost solution to cash strapped consumers interested in a growing library of quality software.
Analyst Colin Sebastian, however, has a different view.
“Since the 3D aspect of games is generating limited interest from consumers, either scrap the 3DS and refocus on the DS, or lower the price of games so they are more competitive with apps on smartphones,” he remarked.
Considering the recent performance of those aforementioned Mario games, we don’t see either scenario happening.
“Nintendo needs to continue convincing the public that the 3DS is for everyone,” said Cassidy. “It's even for those people that aren't interested in 3D. There are many features and aspects of the 3DS that can be used to entice the public. If Nintendo continues focusing on the 3D aspect of the platform, they're going to narrow their possible market.”
With this in mind, we look forward to seeing what Nintendo has up its proverbial sleeve moving forward. One thing’s for sure: the threat to its portable throne is as strong as ever. To succeed, the Japanese publisher will need to be even more creative.
Ultimately, gamers stand to benefit most.
