Smartphones not to blame for sluggish 3DS sales, says Iwata

Nintendo head Satoru Iwata claims smartphones aren't hurting the 3DS market, instead attributing the slow sales to a lack of compelling software.

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Between a hefty price cut, generous make-good offer for current users, and an executive pay cut, Nintendo has made no bones about its 3DS sales woes. But company president Satoru Iwata objects to the idea that smartphone competition is the driving factor, instead blaming slow sales on a lack of software.

"We have repeatedly investigated whether social games, as well as smartphones, are actually affecting our business," Iwata told investors (via CVG). "We got the same results in our latest research that there are no causal correlations. On the other hand, it is the fact that a great variety of games are available at very low prices for smartphones. Naturally, consumers will choose more affordable ones if the video games we provide do not have much more value than those available for smartphones."

Iwata went on to suggest that consumers recognize the "unique value" of Nintendo's retail games. "The biggest reason of the sluggish sales in this first quarter is that there were no big hit software titles in this period," he said. "With the just-announced markdown, we intend to drastically change the situation toward the end of this calendar year, to realize a situation that a number of you cannot imagine today and to have many people acknowledge that there are no causal relationships between our business and either smartphones or social games."

Even if the price cut leads to higher 3DS adoption rates, the price of smartphone games seems to be the elephant in the room. Many 3DS titles cost roughly $40, while the iPhone market saw a race to the bottom with many titles being offered for 99 cents, or free with microtransactions. Nintendo has a strong stable of first-party games on the way, but is counting on consumers to put stock in games with higher production values.

"The keyword 'social' has rapidly become very popular in these last two years and some say that Nintendo may be behind the social age," he said, directly addressing the growing sector. "They might mean that Nintendo, uninterested in so-called social games from a business standpoint, fails to ride on the boom of social games," Gamasutra overheard.

"However, I have a totally opposite view - Nintendo has been a company attaching a high value to human relationships for a long time. We have our roots in the playthings connecting to people, as the company's original business was playing cards. Therefore, we have always been aware of the human connections created by each of our products."

Iwata insists that while social networking facilitates player relationships over long distances, he says "there has been no best answer yet to the relationship between a real network and a virtual network." He says Nintendo's goal is to provide both in-person experiences and virtual networks, including a mixture of the two with features like the 3DS StreetPass.

Nintendo has been somewhat reluctant to embrace smartphones, which is unsurprising since the company is so keen on developing for its own platforms. However, when the company announced a Pokemon-based app for iPhone and Android devices, their stock value ticked upwards -- before settling back down upon comments that Nintendo wasn't investing seriously into the smartphone market. Analysts took this as a sure sign that Nintendo should look more seriously into developing for these platforms, but the company seems to be sticking to its guns.

Editor-In-Chief
From The Chatty
  • reply
    August 3, 2011 9:15 AM

    Steve Watts posted a new article, Smartphones not to blame for sluggish 3DS sales, says Iwata.

    Nintendo head Satoru Iwata claims smartphones aren't hurting the 3DS market, instead attributing the slow sales to a lack of compelling software.

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      August 3, 2011 9:17 AM

      so basically standard Nintendo problems

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        August 3, 2011 9:31 AM

        More like standard "3rd parties need to do something with this shit" problems iknowit'sthesamethingshutup!

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      August 3, 2011 9:35 AM

      Kinda dumb that Nintendo refuses - REFUSES to compete against Apple.

      Nintendo needs to create and sell "objects of desire" - they need some really awesome industrial designers (Japan is full of them, just look at any Anime) to make their handheld look and feel like something from 2025. The 3DS is a sad excuse for a high-end electronics handheld. It's plastic and cheap feeling. Apple, on the other hand, makes their iPhone and Touch out of metal and glass, and it's wafer-thin.

      Nintendo products look and feel like their made for kids - one step up from Fisher Price.

      They are getting more mature games on the Wee-Yoo, so that's a start.

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        August 3, 2011 9:38 AM

        On the other hand, Nintendo products are nearly indestructible. What they need, I think, is a different frame with the same guts to appeal to the adult crowd (besides the obvious 3rd party support, decent online presence, and better battery life).

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          August 3, 2011 10:33 AM

          I dont know what you guys are talking about. I think that adult gamers are typically not so shallow that they only buy handheld gaming devices based on their sex appeal. Sure, its a nice perk, but it is NOT the driving force behind sluggish sales here. Software sells hardware, and the 3ds has a really poor selection currently.

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            August 3, 2011 10:37 AM

            hence my "besides the obvious", adults are buying more techno toys than ever before and relying on children pushing for a device is a strategy that's losing more and more in Western cultures, even as the market percentage is growing.

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              August 3, 2011 10:43 AM

              The smartphone game thing is going to slow down. My dad bought a few game apps on his iPhone out of sheer love for the thing, and will clearly never do so again.

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                August 3, 2011 10:46 AM

                I think it's here to stay as a prominent player though I do agree that the general populace won't be buying as many or as often. Similar to what happened with the Wii though on a slower scale I think.

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                  August 3, 2011 5:20 PM

                  Though the people who bought Wiis at least bought it explicitly to play games on it.

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          August 3, 2011 12:57 PM

          That will come with the 3ds lite in a year or so.

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        August 3, 2011 12:40 PM

        Nintendo is DOOMED because of smartphones and apple. Shorting stock now!

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        August 3, 2011 12:57 PM

        You would expect a huge difference in build quality and design of a $600 smartphone (new and off contract) compared to a $170 dollar device.

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        August 3, 2011 2:45 PM

        The 3DS definitely looks terrible. The mismatch of colors is so odd to me.

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          August 3, 2011 3:12 PM

          It looks rather good in person, imo. It's kind of Zune effect

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          August 3, 2011 4:22 PM

          It looks and plays fantastic and the controls are spot on. The lack of quality games and the $200+ price point hurt though. The only real negative is the battery life, and if it's an issue for you there are add-on battery packs that will take care of that.

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        August 3, 2011 3:27 PM

        I thought the unboxing of the Wii at launch was very Apple like in both packaging and design.

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        August 3, 2011 3:44 PM

        I don't buy portable systems because the hardware looks cool. I buy them because the games look cool.

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        August 3, 2011 4:40 PM

        It's typical Japanese thinking. "We have to much honour to compete with someone who isnt whole heartedly in our business sector." ... idiots.

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          August 3, 2011 4:59 PM

          What part of this is not well thought out, reasonable and indicative of a sincere effort to ascertain the facts. Something that apparently escapes a segment of the shack. Further more, Nintendo has gone out of their way to be forthcoming on the issue of the sales. I see absolutely no reason to question their motives, methodology, or conclusions regarding this.

          "We have repeatedly investigated whether social games, as well as smartphones, are actually affecting our business," Iwata told investors (via CVG). "We got the same results in our latest research that there are no causal correlations. On the other hand, it is the fact that a great variety of games are available at very low prices for smartphones. Naturally, consumers will choose more affordable ones if the video games we provide do not have much more value than those available for smartphones."

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            August 3, 2011 5:06 PM

            I dont backup my statement with fact, i just like hating on the craziness that is Japanese business and way of life.
            I must admit that i am pre-positioned to dislike typical Japanese people with the way my partner has been treated in the country.

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        August 3, 2011 4:54 PM

        I liked the look and feel of the 3ds when I got one in my hands. Nintendo's has a pretty good rep for reliability so I doubt many are worried about that.

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        August 3, 2011 10:18 PM

        I've always liked the look and feel of Nintendo products as opposed to Apple products. Apple products have that superficial "this looks shiny" thing...but I find actually having buttons and tactile feedback and what-have-you is nice.

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          August 3, 2011 10:19 PM

          Also, you're really citing anime as grounds for "good design"!?

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      August 3, 2011 10:14 AM

      we all know that it's the lack of games and the 250 price tag

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      August 3, 2011 10:30 AM

      So smartphones aren't kicking Nintendo's ass, but smartphone software is? Maybe the problem is the boss is a half-insane bullshitter.

      It ain't 1986 anymore and an ugly plastic brick with physical content delivery isn't gonna cut it. Even if a 3DS was a nicely designed piece of hardware AND they had a great one-click all-digital purchasing and content delivery system it would still be a second device people need to carry around for mobile gaming.

      Does Nintendo really think they're going to win the battle for pocket space when their feature overlap starts and ends with physically acquired and stored software costing 1000-3000% more than the competition's ethereal offering?

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        August 3, 2011 3:42 PM

        The thing is the mobile gaming on the 3DS versus what's on the iPhone is completely different. They aren't really competing. Gaming on smartphones sucks. It's totally casual because the platform itself pretty much requires the games be totally casual. The 3DS can have more significant game experiences because the platform is geared more towards that.

        Look at it this way: you cannot have a OoT experience on an iPhone (can you get a 10+ hour game on the iPhone?). It would suck to play it on that device plus people wouldn't be willing to pay the price premium for something with that much content. On the other hand, you shouldn't have an Angry Birds type experience on the 3DS because people are going to feel ripped off (unless it's via the estore or something and only costs $2).

        Both mobile platforms, but completely different gaming experiences.

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      August 3, 2011 12:59 PM

      Software is the only thing killing the 3ds. The DS is still selling well because of software.
      The new price is going to spur a month or two of sales. Then in Mario Land, and Mario Kart by christmas will sell more. And then Icarus and Luigi after the new year.

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      August 3, 2011 2:30 PM

      Face>Palm.

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        August 3, 2011 2:36 PM

        That's hardly facepalm worthy. It's pretty clear that the lack of software was the biggest issue, followed by price. Phone competition is a distant third after those two.

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      August 3, 2011 3:09 PM

      I suspect smartphones and ipads are having *some* impact on the handheld gaming market, but overall yeah, everyone in this thread is right.. we have DSs already and they're not giving us a compelling reason to upgrade, especially not with the original pricetag. There aren't a ton of games that I want to play and can't right now. When that shifts so will my motivation to spend money.

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      August 3, 2011 3:24 PM

      Nintendo is too enshrined to it's properties. It's so stuck on what it previously made, that it can't think to make new things.

      Why is there not a Nintendo produced RPG at the launch? It was one of the strongest parts of the DS with the serious gamer, who have the early mindshare, and would have addressed one of the biggest problems with the system. They clearly have it in them, they did a clever rpg built in to the system for the Mii, but they're so stuck on making a perfect rendition of their old games, they're (generally) afraid to fail on new, interesting games.

      I mean yeah they do new gimmick games. But god forbid they release a turn based strategy game that isn't Fire Emblem.

      Nintendo isn't the only party guilty of this, but I think we can all agree they're the ones most crystallized by it.

      Even though I still love them. :(

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      August 3, 2011 3:53 PM

      I didn't buy one because 3D isn't a selling point for me and they don't seem to have demonstrated any other selling points.

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      August 3, 2011 4:05 PM

      Sure smartphones are not helping but to me, the high price and lack of software was a much higher problem.

      It will sell well when it has plenty of exclusives for it.

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      August 3, 2011 4:14 PM

      Nintendo saw their peak with Wii, imo, and will likely start a steady decline from here on out. i wouldn't be surprised to see them no longer making hardware in 10 years, and instead making software for the other consoles, ala Sega.

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        August 3, 2011 4:16 PM

        Nintendo will be printing playing cards in 10 years

      • reply
        August 3, 2011 4:41 PM

        Troll is troll. This one isn't even imaginative.

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          August 3, 2011 4:54 PM

          Some respect please, he presided over one of the most drawn out declines of all time

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        August 3, 2011 5:10 PM

        lol nintendo peaked with the nes and then again with the snes and then again with the n64 and....

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          August 3, 2011 5:16 PM

          They peaked with the Super NES as far as good collection of games. The N64 was awesome but not better then the Super Nes. The Gamecube was better then the Wii.

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            August 3, 2011 5:22 PM

            If I had to pick one system as the chosen one of the golden age of console gaming it would have to be the SNES. The only point I was trying to make is that people have declared Nintendo dead so many times it gets a little tiring.

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              August 3, 2011 5:32 PM

              I remember the rumor that MS was going to buy them out after the Gamecube

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        August 3, 2011 5:30 PM

        I really doubt it and I have a feeling the WiiU will sell like crazy.

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          August 3, 2011 5:44 PM

          I think the WiiU will have the same damn problem that the 3DS has, people have no idea it is a brand new system.

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            August 3, 2011 5:45 PM

            I think people know the 3ds is a new system, mostly because of the lack of new games for it.

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              August 3, 2011 5:49 PM

              Maybe in the gaming crowd, but to the average mom buying stuff for their kids it is just another DS. It does not help that Nintendo remakes their handhelds three times a generation so this gets lost in the shuffle.

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                August 3, 2011 5:58 PM

                The successor to the Wii is going to get alot more attention than the 3DS.

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                  August 3, 2011 6:00 PM

                  Well hopefully they get their marketing right because their E3 announcement even confused a lot of people here.

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            August 3, 2011 5:46 PM

            Remember all the people that said they'd buy a Wii if only it did HD.

            • Ebu
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              August 3, 2011 5:47 PM

              Yea, and most customers don't buy things that they promise they will.

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        August 3, 2011 5:59 PM

        Is this post a copy and paste from the 2001?

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        August 3, 2011 10:33 PM

        And 10 years ago people said the same thing. Now they've apparently hit their peak with this generation. Funny.

        As long as Nintendo makes Nintendo games, it doesn't matter what glorious piece of shit hardware they unleash on the masses. It'll sell. Cartridges, mini-DVDs, underpowered and waggle. Nintendo has done it all, been declared doomed and survived it all or greatly exceeded all expectations. The only thing that can really bring Nintendo down is another gaming revolution that really changes the industry, but in that scenario, the other big console manufacturers share the same risk.

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      August 3, 2011 4:18 PM

      nice to see some head-in-the-sand action every now and then

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      August 3, 2011 10:16 PM

      I think part of the problem is that Nintendo's market consists of people who care about games. I'm not a big fan of the iOS devices for most gaming...there are a lot of things they just can't do...but I CARE about games...a lot of people do...but the HUUUUGE money isn't in people who give a fuck.