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Iwata: 3DS Selling Below Expectations, Company Recommitting To Promotion
Iwata: 3DS Selling Below Expectations, Company Recommitting To Promotion
April 26, 2011 | By Kyle Orland

April 26, 2011 | By Kyle Orland
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Admitting that sales of Nintendo's new 3DS portable have slowed down worldwide after a successful launch, company president Satoru Iwata committed to turning that situation around with a renewed marketing campaign.

The 3DS sold nearly 400,000 units in its first week of American sales, along with 371,000 Japanese sales in its first two days and 303,000 European sales in its opening weekend there.

But in a recent investor presentation, Iwata acknowledged that those brisk sales have dropped off considerably in the weeks following launch, confirming analyst reports that such a slowdown was occurring.

The company announced yesterday the 3DS had shipped 3.61 million units worldwide through the end of March, below internal projections that the system would sell 4 million units in that time.

In Japan, Iwata suggested that "the great earthquake largely affected the sales," but acknowledged that March's natural disaster could not explain sales that dropped off significantly in the U.S. and Europe after a few weeks on the shelf.

In launching the 3DS, Iwata said the company overestimated the ability of the system's glasses-free 3D screen to drive sales virally.

"We originally expected that the value of 3D images without the need for special glasses would be automatically spread to some extent by many consumers experiencing the device by themselves and ... together with people around them," he said.

Iwata said the company "recognize[s] that we are in a situation where we need to step up our efforts to further promote the spread of Nintendo 3DS" and that "it has become clear that we need to do a lot more to convey the value to consumers."

To that end, the company plans an educational campaign designed to stress the importance of using the 3D slider to perfect the 3D effect for each individual user, and to explain the value of connectivity features like StreetPass and SpotPass.

The company also plans heavy promotion around the late-May launch of the 3DS eShop and expanded 3D video content, focused on encouraging 3DS owners to connect to the Internet and download the system update necessary for the new features. Nintendo will be giving eShop users a free download of a 3D update to NES classic Excitebike to help in this process, Iwata said.

Despite the slow sales so far, Iwata said he was encouraged by market research that showed many consumers interested in the system are taking a "wait-and-see" approach to actually making a purchase. He said that upcoming software releases would help push these consumers to become 3DS owners.

"There is no easy road to making people understand the attraction of glassless 3D images and making Nintendo 3DS widespread," he said. "We would like to adhere to these patient efforts."


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Comments


R G
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I'm not sure if promotion has anything to do with it necessarily. At least to me, I don't feel like I "need" the system, even for the much hyped Ocarina of Time-remake.

Jeffrey Chiara
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I sure don't want to replace my XL with a smaller screen and a feature that adds nothing to gameplay so I can run through Ocarina for the seventh time. Besides, I can always pick up the 3DS 2.0 in nine months if I change my mind.

Joe Wreschnig
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This is the part I don't understand - many sites / gamers are going crazy about every drop of OoT news, but I've already played that game on two platforms. You can buy it already, either for GameCube or on Wii VC. Nearly every other 3DS title announced so far is more interesting to me.



Why isn't anyone (including Nintendo) talking much about Kid Icarus? You know, the game about flying fast in 3D that was shown at every press event?

Mike Siciliano
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Kid Icarus still doesn't have a firm release date. But it's definitely going to be released after Ocarina of Time. Meanwhile, Ocarina is the next big game being released for the 3DS (as far as I'm aware) and it has a firm release date. So Nintendo is pushing that game hoping that it will sell systems during the summer.



Nintendo has talked about spacing out releases to keep momentum high. So after Ocarina is released, expect Nintendo to push Kid Icarus quite hard. Then expect them to push Mario Kart, then that 3D Mario game, etc.

Jonathan Jou
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Easy! It's not just a remake--they're adding stuff! And, uh, there is a whole generation of gamers (or more) to whom the nostalgia factor is so large that they'll buy it again just for a texture upgrade and Boss mode.

Russell Carroll
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I'm looking forward to playing it for the first time. I was a poor struggling student and newly-wed when the game came out. I missed pretty much the entire n64 era and a good portion of the GCN era as well.



Though I have the GCN disc I never played it b/c I really struggle with N64 era graphics...especially on an HD TV. Actually games in 3D worlds often make me ill, but I find if they have good smooth camera movement and 60 fps I'm ok. (my biggest worry actually is this new version making me ill as it is said to be 30 fps)



OoT came out more than 10 years ago. That's really a very long time in the gaming world. I expect there are a lot of gamers playing now who were too young to have played it before, or who like me, have trouble going back and playing those older games (specifically 1st generation 3D poly games...I love the SNES era and all things 2D!).

Those who played the original OoT back in the day probably have a healthy dose of nostalgia helping them see much better visuals than are actually on the screen.

Kris Steele
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3D is a gimmick. You can't sell a system on a gimmick alone.

Jamie Mann
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It might be worth clarifying the 3DS numbers in this article: Nintendo's financial statement indicates that they've sold 3.61 million 3DSs (i.e they're in the hands of end-users), not shipped (which would imply that some of the units are sitting in shops, waiting to be sold).



Beyond that; there's clearly a lot of dissatisfied 3DS users out there. The local CEX (a national used-hardware store in the UK) has twelve boxed 3DSs sitting on the shelf at £200 apiece. Though they're not likely to be sold anytime soon; the game shops and HMV (national CD/DVD/game retailer) have dropped the price of a *new* 3DS to £185, as well as discounting all of the games to £35.



The fact that they're all doing this - so soon after launch - implies that sales are seriously weak.



It'll be interesting to see if Nintendo can rekindle interest in the device before it's dismissed as an overpriced gimmick...

zed zeek
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No, the 3.61 is Shipped.

Its pretty plainly obvious looking at nintendo's statements (where they show sales numbers per region for the first 14 weeks), which are a lot less than the 3.61 added together.

eg up to last week, there has been ~900k sold in japan (check the number trackers). But the 3.61million figure (end of march) states 1.06million in japan!

Jamie Mann
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The exact statement from Nintendo's financial statement is:

"the worldwide sales of the Nintendo DS, Nintendo 3DS and Wii hardware were 17.52 million units, 3.61 million units, and 15.08 million units respectively."



(http://www.nintendo.co.jp/ir/pdf/2011/110425e.pdf if anyone wants to read it themselves)



Given that this is a legally binding document from a long-established company who have been publishing these reports for decades, I'd expect sales to mean sales, and for these figures to be both up to date and accurate. Anything else would leave them vulnerable to being sued by investors and/or investigated by the Japanese Financial Services Agency.



Conversely, most number trackers use third party estimates and may be a week or more out of date.

A W
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We just want the games. Bring us the games and we buy. New content that show why the tech is needed.

Maurício Gomes
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To me the 3DS is a big wtf. Even when people were all hyped up about it...



It is simple, to me at least, 3D without glasses SUCK, it REALLY suck... No matter what I put on the slider, it puts a major strain on my eyes, and the effect is crap... This also apply to TVs without glasses (I saw a couple of those, before they even hit the market, when in a tech expo here Samsung showed some prototypes)



But I watched Avatar movie, with 3D glasses, like if I was not wearing 3D glasses at all, after the movie I almost forgot I was with the glasses and that the movie was 3D...



So, what is left on that system?

Nothing the DS already cannot do...







Now I will return playing my Dingoo that I bought for 50 USD.

Ed Alexander
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Personally waiting for the "3DS Lite" version that has a better battery life.



What Nintendo has taught me is they're going to make a piece of hardware, then shortly thereafter make a better version of it that is more compact.



It's not hard to see that being an Early Adopter of any new technology these days means you're going to pay a premium price for an "inferior" product. I'd rather Nintendo work out the kinks from the 3DS and deliver a product I feel more compelled to throw down all that money on. I mean, this is a handheld being sold at basically the cost of a console...

Jeferson Soler
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I'm in the same boat in regard to waiting for an updated version of 3DS. In the meantime, I do have plans to start getting the 3DS games library ready, so I'll buy 3DS games that interest me as some of them may not stay in stores for long.

Josh Bakken
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I dooooooo like Excitebike though. Seriously, I do. That may be the thing that gets me to buy one. I almost bought a 3DS a few weeks back just for fun but I'm currently in the "wait-and-see" camp they mentioned above. If the NGP was out though (or even close to being out) the 3DS wouldn't even be on my radar.

George Katsaros
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Today's 3D technology is an illusion. I want True 3 dimensions. That's something that the future will provide.



Star Wars holograms. That's what it's all about.

Jeferson Soler
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Dragon's Lair/Space Ace co-creator, Rick Dyer, tried to do something like that with the arcade version of Time Traveler: Hologram.

Jonathan Escobedo
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For me it's not the fact that I don't want one, it's just that I can't afford one at the moment. Trust me, there are games that are coming out that I want to get, but with college loans and car payments, the 3DS is just a little too pricey right now for me.

Eric Geer
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GAMES GAMES GAMES.



Promotion is not needed...and Iwata has said it in the past...its Software that will sell the Hardware. If there's no good games..this leads to the conclusion that the systems not worthy to buy for most people.



Yes there are good games coming out..but they aren't here yet..so everyone is waiting.



Another thing is that it's still not ready to meet its potential with the eStore still not active....



It will sell but just get some games out there first. Not much you can do with a game system without proper/well done games.

Andrew Traviss
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Nintendo underestimated how many people would actively dislike the 3D effect. The reaction seems to vary wildly. I personally was floored by the quality of the illusion (especially the AR game), but my wife was underwhelmed and a little disoriented by it. You can't gain a viral marketing effect when the effectiveness of the hook is so inconsistent from individual to individual.



Battery life remains my biggest complaint. With a life the short, it feels like it should be a living room device, but the screen is too small for the modern ideal of the living room device.

Merc Hoffner
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I actually think you've hit on a really weird point. I think Nintendo underestimated the viral effect of 3D hate mongering. I've watched a lot of people (a LOT of people) re-itterating how the 3D doesn't work because the BBC said the Times said the Sun said the 3D fries people's brains, backed up by hate from 'gamers' quoted off the comments section of the Eurogamer article that actually refuted the claims and identified investigative shenanigans on the part of the source. It's a self referencing circle of hate out there for Nintendo, and my work colleagues insisting (read: INSISTING) the device in my pocket is killing people, rapidly gives way when I actually show them it - else they refuse to look for fear of spontaneous explosive aneurism.



It's not confined to this one device, and I've wondered recently, why does this circle of negativity seem to aggregate around Nintendo while a miasma of positivity accumulates around Apple? Obviously I'm biased, but I have both Nintendo and Apple's wares, am shocked that I seem to be living in the future we longed for, and love both to bits, but only one is magical. I've just found it soul crushing that the word is out that that bit of magic in my pocket is apparently the work of the devil (...that's what she said...). What can I say? Nintendo has Negahype and Apple has Posihype. I guess adjusting the marketing is the thing to do.

Eric Geer
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I think there is some truth the the Negahype and Posihype...but there is a dichotomy to the whole thing---



I've shared my 3DS with lots of people...and none have complained and only praised the system and the 3D effect---its a word of mouth that is hit or miss...my guess is that 3 out 5 of those people will probably buy the system...and they don't buy systems--they should use other peoples...



Though I only know a few people with iPads..but they also seem to be Apple whores...ipad, iphone, itouch, Apple computers, itoiletpaper, etc...



I think its a real hit or miss---and generally the media/news like to latch onto the negative issues..because it seems to get more attention...



I don't think we will really know how successful it will be until Holiday 2011---because of cost and lack of software.

Merc Hoffner
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Also, if you consider that your 3 out of 5 would be secondary purchasers and may not be so inclined to part with cash in March so much as Winter, this Winter may be particularly telling.



PS - Inception! I totally inserted new vocabulary into your lingo. Coining ftw. Thanks for getting the ball rolling. jk/

Ian Uniacke
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Interesting...so you think 3ds is New Coke? It's possible.

Amy Austin
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Then there's the fact that some of us can't tolerate extended 3D anything. 3D movies give me migraines, so I have no personal interest in 3DTV. My co-worker has a 3Ds and I played around with it for a few minutes one day, while it's cool and all, even at one of the lower 3D settings, after 5-10 minutes with it I came away feeling a little "sea sick". I don't know if I'm in a minority or majority, but it is a problem and it was also the moment I knew for sure I wasn't going to be getting a 3Ds and happy I didn't spend $250 to have that epiphany.

Chris Skuller
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Maybe instead of marketing they should focus on getting out a killer app. Right now the best games for the system are ones that have already been released elsewhere. That is why the sales have slowed. Where is Mario 3D or a new Metroid? Games sell systems.

kevin Koos
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Besides 3d problem Nintendo keeps saying they aren't competing with the iphone/ipad/smart phones ect. Terrible miscalculation. You will get kids and core gamers but a lot of causal DS gamers can get their fill on a iphone and don't want to dish out that much cash. Even if people want one some just can't afford a DS and ipad at some point you lose sales. I don't need an extra thing to carry around right now, if I cant make calls on it i dont want it.

T K
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3DS is like the last dinosaur before the meteor hit. 3DS is overpriced, legacy cartridge system, 3D is a "gimmick", and probably the biggest killer: game prices way way too high compared to other mobile games. Specifically iPhone/iPad/Android games are $1 compared to $30+ for the 3DS.



Why do you think Nintendo preannounced the Wii2 way before they wanted to? Well, they just put out a horrendous earnings report and they needed something/anything to deflect attention off the core business (DS, Wii) which are falling off a cliff.

Baback Moussavi
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I somewhat agree with this statement, yet the mobile platform games yield a much different experience than what you'd get from a portable console.



While not all games on mobile platforms are real simple pick-up games, a lot of the huge sellers are (Angry Birds, Cut the Rope, etc.). While those games can be fun for a quick 5 minute game, they just aren't substantial enough to warrant charging anything over $1, in my opinion.



PSP, DS, 3DS games offer much much more complete games and more closely resemble their big brother consoles as far as giving a more immersive gaming experience is concerned. They're great for long road trips, airplane trips, or any situation that allows you to get more immersed in the games you're playing.



I think it really boils down to what you have access to hardware-wise and what type of experience you are looking for. Not to mention what type of situation you're in (10 minute wait at the doctor's office versus a 5 hour plane trip).



I am leaning towards others' opinions on here. I mostly think that the reasons why the 3DS isn't selling quite as well as expected are due to lack of software and people either getting sick from seeing the 3D in action or being turned off completely by the whole 3D phenomenon.



One closing note...who in their right mind would ever prefer to play a game like Street Fighter IV on an iphone versus a 3DS? The touch screen phenomenon is cool in some regards, but...much less than ideal in most gaming situations.

Daniel Gooding
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Pricetag is what gets me. Gameboy was traditionally the kids travel console. Takes a bit of convincing for a parent to buy their children a $250 game system that can easily be stolen or smashed to bits at school.

Lo Pan
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I'm saving all my money for the NGP...now that is a man's gaming handheld! :-)

Ian Uniacke
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Clearly you are too much of a self respecting grandpa for the 3ds.

A W
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I'm just saving all my money period.

Leon T
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The problem with 3DS is lack of games. Everyone I showed it to loved the system , said they wanted to buy, but are waiting for more games to it. At $250 Nintendo's biggest screw up is not launching with more hit first party titles. If Nintendo really thinks that a hardware feature will sell the 3DS they have lost it.

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Ron Alpert
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lots of onions in here, so here is mine. I am very interested in the 3DS potential, but to excho sentiments above, nothing at launch appealed to me at all. The high price and system weaknesses (smaller screen, batt life) all add up to a new console that seems, in a way, half-baked at this time. I suspect we will see some excellent software in due time for the device, but really I am not feeling so impatient that I need to hurry up and get the system just to wait for them.



I think 1 year from now things will be much more positive for this device, and in some ways I think this bodes horribly for the reception we will see for the NGP.


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