Are Gaming's Biggest Portables Becoming Its Smallest Niche?

Last week's drastic, surprising price drop for Nintendo's 3DS gaming portable brought turmoil not just to the last major dedicated gaming hardware company in the world, but also the notion of portable gaming.

While fans of Nintendo worry what impact the nearly one-third price drop on such a new piece of hardware will have on the company, others worry whether the early failures of the 3DS signals a change in the way people want to game on the go.

Can dedicated portable gaming devices succeed when their competition includes Apple's iPhone and devices like it that deliver a steady stream of good and not-so-good games that cost less than a cup of coffee?

On July 28, Nintendo announced they were cutting the 3DS from $250 to $170 just five months, and about 900,000 sales, after the portable launched. Those who already own the system were told they would be receiving 20 free downloadable games between now and the end of the year to make up for the early price cut.

But none of the people I spoke with think that the price was the only reason the 3DS had such a terrible launch.

"I don't believe price was an issue at all," said EEDAR analyst Jesse Divnich, "it was other factors such as the strength of the software library."

While Wedbush Securities analyst Michael Pachter thinks that price was the biggest contributor to weak sales, he also points to the light software launch lineup as a chief problem.

"I think price will help a lot," he said, "but software will help even more."

Even Nintendo is a bit coy about blaming the entire problem on pricing. Nintendo of America's Charlie Scibetta says that the company hopes that the price drop will "remove whatever barriers might have prevented people from deciding to purchase a Nintendo 3DS." But he also points out that Nintendo is "looking at our lineup of terrific games... as a way to motivate people to buy."

"Our library is growing all the time, and Nintendo 3DS enjoys some of the strongest third-party support of any system in Nintendo history," he said. "Just looking at the games we have now and the ones that are coming should give you an example of the great content that's in store."

Another problem the 3DS faces is that it serves a very singular purpose in a time when people tend to expect more of their electronic devices. Phones have become the go-to device for many technophiles, serving not just as a way to stay in touch, but as an organizer, a phone, a music player, a work device, and even a way to play games.

The biggest challenge the 3DS faces, I think, isn't convincing people of its value, but that the device is worth the space it will take up in a pocket, briefcase or bag. And that's the issue that all current and future portable gaming devices face.

MTV's video game writer Russ Frushtick says that the problem isn't the price or the games, it's that no one wants to carry another device around with them.

"I don't see dedicated handheld gaming devices ever going anywhere but closer to extinction," he said.

Divnich disagrees.

"Mark my words, consumers are always willing to pay a premium price for premium content and the rise of the 99-cent mobile game has done little to disprove my theory," he said. "All Apple has shown us is that there is a substantial market for bite-sized interactive entertainment. I have no doubt that Apple (and Google) will one day offer technology that allows for in-depth interactive entertainment at a premium price, but that still doesn't change my theory that regardless of the technology, consumers will pay a premium price for premium content."

Nintendo remains confident in the 3DS' eventual success too, for much the same reasons.

"Nothing can compare to the deep, engaging experiences that dedicated gaming systems like Nintendo 3DS offers," Scibetta said. "Additionally, Nintendo systems are the only place you can enjoy great Nintendo characters and franchises like Mario, Donkey Kong and The Legend of Zelda."

The viability of dedicated portable gaming devices, and the relatively pricey games they play, must be something that Sony is considering now too as they prepare to launch their $250 Playstation Vita portable. But where Nintendo's 3DS differentiates itself by providing the ability to view 3D without the need for glasses, the Vita's selling point is a bit more narrowly focused. The Vita is meant to be a powerful gaming device that comes with all of the functionality, controls and buttons that a gamer might expect for their games.

It's the sort of device that I think can succeed against the likes of Apple and Android devices because it embraces its singular nature and is striving to deliver gaming that mirrors the home experience, but on a smaller screen. For hardcore gamers, that could be enough of a reason to carry a Vita with them even if they have a phone that will let them play quick and easy games.

Pachter sees success too, for both the 3DS and Vita, though perhaps not at the level that Nintendo and Sony might be hoping for.

"‘Can't survive' is a gross overstatement," Pachter responded when I asked him if dedicated gaming portable devices were doomed. "I think that dedicated portable game devices will have a sizeable niche audience, so they will most definitely survive."

Well Played is an internationally syndicated weekly news and opinion column about the big stories of the week in the gaming industry and its bigger impact on things to come. Feel free to join in the discussion.


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