(This post was published on my old blog on Saturday 30th July, but it still holds relevance so I’m putting it here to start fleshing this new site out.)
It’s the first loss Nintendo have posted in nearly 150 years of operation, but it’s official. The 3DS hasn’t performed to the high expectations that Nintendo had pitched for it, and has made a quarterly loss of $195 million. Shares fell by 12%, and the Nintendo 3DS is getting an incredible price cut of a third. Not only that, but Nintendo boss Satoru Iwata has taken a 50% paycut, taking the blame for the trouble. Many other execs are also taking 20-30% paycuts as well, so say what you like about the troubles but you wouldn’t see responsibility taken like that here in the West.
The problem is – furthering my last blog post, many are now saying the PSP2, or Vita, will be the final nail in the coffin for Nintendo. The problem is, however, more complex and Sony are looking on over this fiasco – not with any smug satisfaction, but with genuine fear and concern for their own future.
Why? I’ll explain.
The Nintendo 3DS is the first portable 3D device – well, we’ll forget about the Virtual Boy. IT DID NOT EXIST WE WERE ALL ON HOLIDAY! Ahem. However, with the decline of 3D and many developers and/or publishers already giving up on the whole concept of 3D Games (EA were the latest to pull out today) the simple fact is the 3DS was testing the waters for the new era of 3D, and Sony sadly were hoping that the 3DS would probably attract more attention than it has.
The reason for this is simple – Sony are putting a lot of emphasis on 3D games for the PS3. They have 3DTV technology to push, and 3D Movies to sell (which likely also means that the 3DS, as a portable 3D device, would end up in the crudely ironic situation of Sony movies on a Nintendo handheld). The failure of 3D, and the 3DS, means that the large investment Sony have put into their 3D research and development is going to be throwing good money after bad.
It’s probably a bit strong to say Sony needed Nintendo to make good on the 3DS – but it wouldn’t be entirely without truth to it. The 3DS was in many ways setting the scene for the push into 3D gaming, and Sony would have been looking on nervously – not because they didn’t want it to succeed, but rather wanting it to instead to show that consumers aren’t completely abandoning the 3D ideal. That the 3DS is losing third-party deals, having games cancelled and generally not doing so well is a real blow to Nintendo – but an even greater blow to Sony, who have much more to lose in the 3D space than Nintendo.
Another reason is the rise of Android and iOS platforms for gaming, with many big-name titles being pushed out on these devices than the 3DS or even the DSi. If we accept the mobile platform wars are as much gaming platforms as technical showboating, then they are indirectly competing with the 3DS.
If consumers are happier paying pittance for an app over £30 for a 3DS game, and getting their phone free on contract rather than spending £120 for a 3DS – Sony have a massive issue on their hands. Because their machine will cost closer to £300. And that includes losses. If the handheld console market is slowly being weakened from underneath by the rise of the mobile platforms, then yes, Nintendo may fall first. But Sony have a lot more weight to carry, and they’ll make a far larger mess.
The final reason I feel Sony needed the 3DS to do well is simply to maintain a status quo. If you’re going to have a machine that costs twice as much as your rival, you need your cheaper rival to put up a commercial fight.
And if the fish aren’t biting on an earthworm, it is very unlikely a few meters down the riverbank you’ll have much more luck with a bit of lobster.
The failure of the 3DS may be, simply, that the market isn’t and wasn’t ready for a new handheld device. It may be we needed to see what the mobile platforms did before the consoles built their bridges over it. Whatever the reason for the poorer than anticipated sales – Sony are desperate for their machine to fare better. And if Nintendo – who have dominated this space for 23 years – are struggling, why would anyone think Sony will swoop in and take the glory? The industry doesn’t work that way – especially if you’re selling the premium version in a market no-one really has bought into yet.
The Nintendo 3DS shouldn’t be a failure overall – it’s a lovely device, although I am the first to admit I can’t play it on 3D. I just can’t, it annoys me, but it has plenty more oomph in there and has a lot of games I actually do want – Kid Icarus, Resident Evil: Revelations, Mario Kart 3DS and more. In the long-term, Nintendo are hoping these are teething problems. Something that in a year or two will be forgotten under a swamp of sales.
But Sony will be waiting nervously on the side of the stage. Nintendo are alone, performing on their stage and not getting much love from the crowd. Sony are basically waiting to do the same act in a pair of silk pajamas – and if Nintendo can’t rouse the crowd, it is unlikely that Sony will fare much better when it takes the stage towards the end of the year.
Despite being in competition, these two companies really do rely on each other. As much as they would never admit it. But they do. And Sony have relied on Nintendo to lay the foundations for a lot more than simply a handheld gaming console… It was a big ask. Nintendo are struggling… and Sony. Well, they don’t want to jump in too early, but if they need this market to work and the Vita to do well, then they may have to concede to helping Nintendo out in some way.
Time will tell. But Sony won’t have it easy… if anything, Sony are going to have a much rougher year than Nintendo can ever dream possible.
Watch this space. Because it’s going to be awesome, amazing, troubling.
And disturbingly messy…