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After strong start, the Nintendo 3DS stumbles

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Nintendo's Satoru Iwata

While the 3DS shot out of the gate at launch, the system lost its breath pretty quickly.

Nintendo has acknowledged that sales of its new portable gaming system have slowed down -- and it's not entirely sure why.

The best guess is that Nintendo has put so much emphasis on the system's glasses-free 3D tech that potential buyers aren't aware of the other things it has to offer, such as its StreetPass feature or augmented reality software. And with so many people still sitting on the fence about 3D, they don't see a reason to update their existing DS units.

"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," says Nintendo CEO Satoru Iwata. "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."

While first week sales of the device were in line with what Nintendo was expecting, things began to go south in week two...all over the world. To regain momentum, the company plans to launch a new marketing campaign that will give a broader look at what the 3DS can do.

Two things are clear: The 'taking it to the streets' idea -- - letting consumers get their hands on a system to show them what commercials could not -- seemed brilliant in concept, but has, in some ways, been a hindrance by only focusing on the 3D aspect. And the early game lineup hasn't done much to show why 3D is a compelling game mechanic.

"The value of 3D images without the need for special glasses is hard to be understood through the existing media," said Iwata. "However, we have found that people cannot feel it just by trying out a device, rather, some might even misestimate it when experiencing the images in an improper fashion."

In an effort to boost the system's value, a refresh is on the way next month that will launch the 3DS eShop and added 3D video content. To encourage users to download the update, Nintendo says it will give eShop users a free download of the classic NES game Excitebike, which has been updated to 3D.

One thing Nintendo's not wavering on? Price. While some have suggested the 3DS's $250 price tag might be too high for a handheld system (especially when compared to the $150 launch price of the original DS), Iwata didn't show any indication that the company is rethinking its cost strategy.

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