Faced with horrendous earnings and ongoing weak demand, Nintendo has dramatically lowered the price of its 3DS handheld system just four months after the system hit store shelves.
Nintendo 3DS (Nintendo)
Starting Aug. 12, the company will drop the price of the 3DS from $250 to $170 -- a move it hopes will spark flagging consumer interest and lay the groundwork for a strong holiday season.
And, in a move designed to prevent a backlash from the system's early adopters, Nintendo announced it would give existing owners of the system 20 free downloadable games from the Nintendo eShop.
The collection of free games is a pretty notable one. Starting September 1, people who paid the full $250 for the 3DS will be able to download 10 NES Virtual Console games for free before they become available to players who waited for the hardware discount. The titles include Super Mario Bros., Donkey Kong Jr., Balloon Fight, Ice Climber and The Legend of Zelda.
Then, at the end of the year, they'll get another 10 Virtual Console game -- this time from the Game Boy Advance lineup - which will only be made available to the $250 early adopters (Nintendo has euphemistically labeled this group members of its "3DS Ambassador program.") Among the titles are Yoshi's Island: Super Mario Advance 3, Mario Kart: Super Circuit, Metroid Fusion, WarioWare, Inc.: Mega Microgame$ and Mario vs. Donkey Kong.
The move might quell frustration from existing users and lure in new buyers, but it won't prevent people from pointing to the 3DS as a significant stumble on Nintendo's part. The company had bet heavily on the system -- which lets users play games in stereoscopic 3D without the need for special glasses -- to help it regain ground lost to mobile devices like Apple's iPhone. But the high price and weak launch lineup of software quickly killed any momentum.
"It is now clear that the combination of these new features is not necessarily easy-to-understand by just saying one word to those without experience," said Nintendo CEO Satoru Iwata at the time. "We have found that not all Nintendo 3DS users enjoy this software. There seems to be more than a few consumers who have Nintendo 3DS hardware but don't know about this software and possibly haven't had a chance to get interested in it."
Nintendo hasn't had a good year on the console front, either, with Wii hardware and software sales dipping significantly. The company did not mention any cuts for that system, however.
Beyond the 3DS price cut, there is hope for the system as it finally appears to be beefing up its software lineup. Critically-acclaimed hit The Legend of Zelda: Ocarina of Time 3D launched a few weeks ago, and before the end of the year, heavy hitters like Star Fox 64 3D, Super Mario 3D Land and Mario Kart 7 will be on store shelves.
Investors certainly hope the price cut will turn things around. In its first fiscal quarter, Nintendo saw its revenues drop by more than 50 percent compared to a year ago. It also reported a $328 million loss -- it's first ever quarterly loss. The company has further slashed its annual earnings expectations to 35 billion yen, it's lowest since 1985.
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