How Nintendo kept its successful handheld from stumbling into an early grave.
It was supposed to be easy.
At least that's how Nintendo must have felt the eve of the March 27 3DS launch, and why not? In seven years, the publisher sold over 149 million DS systems. With that kind of support, fans should have lined up by the thousands to buy this new system. It was as close to a hardware guarantee as a company could make. Millions sold? Try sold out.
There were critics, of course, those who said the initial $249.99 asking price was too high. Those same people were also quick to point out a lack of quality launch software. Pilotwings Resort looked solid, along with Nintendogs + Cats, neither of which had Mario's star power. Forget about WuHu Island. Consumers wanted to explore the Mushroom Kingdom.
That notwithstanding, it should have been easy. It seemed that way the week before launch, with a select number of hardcore supporters camping out at stores, and growing lines leading up to the 27th.
Then the machine finally arrived, and something was immediately wrong. Retailers failed to sellout, kids complained of headaches (the result of too much glasses free 3D, the system's most touted feature) and software languished on shelves.
What ensued were almost five months of backlash, both from new 3DS owners unhappy with the software lineup, to Nintendo's own shareholders who complained about the tumbling stock price.
Suddenly, the big N found itself in a precarious position, faced with disappointing returns and pressure to develop for Apple's iPhone and iPad, with Sony's PlayStation Vita on the horizon.
Some wondered if 3DS was the new Virtual Boy, Nintendo's doomed system that didn't last one full year on the market. Things were so uncomfortable that President Satoru Iwata took a 50 percent pay cut. How many CEOs not only agree to do that, but follow through?
Suffice to say, things looked grim, where not even the release of The Legend of Zelda: Ocarina of Time 3D in June significantly raised the unit's appeal.
By now, you probably know what happened. Nintendo made a plethora of strategic maneuvers, and 3DS surpassed the DS' first year of domestic sales in just eight months.
That said, it's important to understand how Nintendo achieved this goal. 3DS wasn't dead. Far from it, but even the most diehard supporters had to admit the company stumbled, if not with the price of the system, then the delay of the 3DS eShop, or Mario nowhere to be found.
With this in mind, Nintendo righted the ship by:
Slashing the price
We'll never know if 3DS would have performed differently at $250 had Super Mario 3D Land been available at launch day one. Regardless, it's safe to assume many consumers experienced sticker shock and refused to spend that kind of money for a Nintendo handheld, not when past systems were under $200.
Dropping the price to $169.99 immediately resulted in a sales boost, while making the device cheaper than both the base model PlayStation Vita ($249.99) and iPhone 4 ($199.99 with two-year contract).
3DS Ambassadors Program
Nintendo didn't have to reward early adopters who forked over the dough for 3DS. It could have simply reduced the price and moved on. Instead, the company took the classier route with the Ambassadors Program. Not only did those users receive a certificate, but also 20 free video games, ten for both NES and Game Boy Advance. That's how you reinforce customer loyalty.
Delivering Monster Hunter to the masses
Both Capcom and Nintendo shared the spotlight during September's Tokyo Game Show, where we learned Monster Hunter 3G (a port of Monster Hunter Tri on Wii) would appear on 3DS in December.
More importantly, the next entry in the popular series, Monster Hunter 4, was also in development for 3DS, slated to arrived in 2012.
How huge is Monster Hunter in Japan? The franchise helped Sony's PSP remain afloat, while the recently released Monster Hunter 3G (released December 10) has already sold a healthy 500,000 plus copies. Its mere presence lifted 3DS hardware sales, with 378,144 machines sold between December 5 and December 11.
We don't expect the game to do nearly as well in the U.S., but it's clear Nintendo will only benefit from Capcom's support moving forward.
A flood of quality games
After months of slim pickings, the 3DS software train kicked into high gear, with such critically acclaimed titles as Star Fox 64 3D, Tetris: Axis, Nano Assault, Ace Combat: Assault Horizon Legacy, FIFA Soccer 12 and Skylanders: Spyro's Adventure arriving just in time.
Double dose of Mario
It took Nintendo eight months to bring a new Mario adventure to 3DS, but at least on the positive side, Super Mario 3D Land was well worth the wait. Fans seemingly agreed, snatching up more than 625,000 copies in the U.S. alone.
Nintendo was also wise to bundle the game with the handheld, selling the package at $199.99.
Then the publisher delivered Mario Kart 7 December 4. It remains to be seen how well the game has done in the States, but it crossed the 400,000 mark in Japan a while ago.