Nintendo 3DS announcement a "worst-case scenario"

Yesterday was a big news day for Nintendo fans. At its press conference, Nintendo President Satoru Iwata gave us some details on the launch of the Nintendo 3DS, and sadly all the rumors of a holiday launch were just that: rumors. In fact we still don't have a specific launch date for North American or Europe. In Japan it'll launch on February 26th, in North America and Europe sometime in March. In Japan the price will be 25,000 yen (~$299) but so far we don't have pricing info for other markets. 25,000 yen gets you the 3DS, a charging cradle, a 2GB memory card, and a telescoping stylus. Best guess of most Nintendo fans, given pricing differences for prior Nintendo products, is $249 for the US, but I hasten to add that's pure speculation.

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If you want to see the whole launch presentation, Nintendo has put it online. The site is in Japanese but on the right are links to video or text versions in English. In addition to the 3D aspect, some other new features of the 3DS include an enhanced 'tag mode' (where your 3DS will contact others units nearby even when both systems are sleeping) that'll let your 3DS play games while you're too busy to! There's also a neat feature where the 3DS will take a picture of you and generate a Mii (what Nintendo calls its avatars) from it. In addition to the info on the 3DS, Iwata announced a new Wii peripheral that combines the base Wii Remote with the Wii Motion Plus Sensor. No specifics on exactly when, but in my opinion this peripheral should've already been out. If Nintendo wants third party publishers to support the increased control fidelity of the Motion Plus they need to get it into gamers' hands. This new version ought to replace the standard Wii Remote altogether, and that includes the controller that comes with a Wii. Now the bad news. Wall Street isn't reacting well to the fact that the 3DS won't be on store shelves for this holiday season. Nintendo's stock fell 4% on the news. According to The Wall Street Journal, Nintendo held off the launch because it was concerned about not having enough inventory on-hand to meet demand (the Nintendo Wii was notoriously hard to find after launch, though that just seemed to heighten its desirability). The delay, in addition to the strong yen, has led Nintendo to cut its profit outlook by half. Jay Defibaugh, an analyst MF Global FXA Securities, calls this a "worst-case situation." He wanted the 3DS to be out for the holidays at 20,000 yen and for it to include 3G connectivity. Iwata himself has said the company isn't "overly-optimistic" about the launch, since the 3D capabilities are hard to sell via print or traditional video. You can't see the 3D effect until you hold the unit in your hands. On the other hand, Industry Gamers is reporting that Nintendo says it plans to sell 4 million units in the first 34 days of launch! (Industry Gamers doesn't provide a source.) Personally I don't see the February-March launch to be such a big deal. Nintendo fans are loyal fans and they'll buy new hardware whenever it becomes available. To me the price is going to be the problem. I predict an initial launch sales spike, followed by a slow build-up period for the 3DS. Early adopter Nintendo fans will buy at $249 and show their new toy off to friends. Word of mouth will spread, and then about this time next year Nintendo will drop the price to $199, setting Nintendo up for a strong holiday 2011 season. Remember, you heard it here first. Let's end on a positive note by taking a look at this trailer showing off some of the games headed to the 3DS.

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