Nintendo is Competing (and Winning) Against Itself this Holiday
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After Nintendo’s abrupt reveal of its new 2DS handheld, I penned a little piece covering a few gripes with the system—most notably, that it’s a pragmatist’s worst nightmare, and Nintendo should worry less about its handheld line and more about its console standing. Interestingly, Nintendo has since clarified its intentions with the 2DS, with Nintendo of America President Reggie Fils-Aime stating (reported by ShackNews) that the 2DS is explicitly targeted to “very young kids: five, six, seven years old.” With this in mind, coupled with a number of unexpectedly positive hands-on reviews of the system (GameInformer’s is quite good), I owe the 2DS an apology. It may be an entirely needless system, and one with a strangely ad hoc marketing strategy behind it, but the little blue gaming cheese wedge is a sound idea that stands to line Nintendo’s pockets this holiday season.

The 2DS is fundamentally needless in that Nintendo didn’t need it to dominate handhelds this holiday; the 3DS and 3DS XL would have done that on their own. However, the 2DS does purport a number of advantages over its 3D cousins. The $129.99 price tag comprises a significant discount compared to a standard 3DS, and really shines when placed alongside the $199.99 3DS XL. This will attract buyers otherwise deterred by the lofty price of the DS line. Of course, the larger portion of those buyers will be parents of the aforementioned five- to six-year old demographic. Fils-Aime commented on this exact prospect himself, saying, “What we did here was we focused in on a key consumer segment, the consumer that right now for the standard 3DS, $170 is a bit of a higher price point.”

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More importantly, the 2DS is set to become the premier home of Pokemon X & Y, which are, conveniently, also set to debut in October. This further bolsters the lowered price tag, as it offers a sweeter entry point for players who only want a DS to play Pokemon X & Y, and for parents who have for months been hounded by kids who want to do the same.

This says a number of things about Nintendo’s underlying plan for its new handheld. First and foremost: Nintendo expects it to sell like hotcakes day one, with the Pokemon name leading the charge. Secondly, Nintendo will likely relax the 2DS pedal by the end of 2013 or in early 2014, because at that point, the 2DS will have burnt out its prime incentive—a lower price tag for a younger audience—and no longer be the next big handheld. And that’s fine; all the 2DS needs to do then is sit on GameStop shelves and flaunt its $129 price tag, because parents everywhere won’t find cheap any less enticing with age. Third, and arguably most important, is the strong inference that Nintendo is staying true to its hardware position of not losing money per unit.

Unlike Sony’s plan for the PlayStation 3, which consisted of eating unit loss after unit loss while banking on future software sales, Nintendo isn’t fond of the concept of delayed profit. This has served the company well in the past, and is one of the primary reasons it’s currently sitting on an enormous pile of raw capital. Furthermore, assuming Nintendo won’t be losing money by producing 2DS systems, it doesn’t matter if it detracts from 3DS or 3DS XL sales; Nintendo will still be racking up customers and profits. In fact, the argument that the 2DS is actually a more profitable system for Nintendo can easily be made after accounting for a factor revealed only yesterday: the Pokemon X & Y edition 3DS XLs will likely not include the game itself.

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This may sound like nothing more than an annoyance at first glance, but the absence of corporate-sanctioned X & Y bundles (you can bet GameStop will slap the things together) is incredibly strange. Virtually every unique or limited 3DS handheld in the past—from other Pokemon iterations to Fire Emblem: Awakening—came prepackaged with its designated title. Derivatively, that the Pokemon: X & Y editions are not paired with the games suggests that Nintendo would prefer the games be bought after ringing up a 2DS, rather than a 3DS XL. This would only be compounded by the reveal of 2DS bundles of the game, which are entirely plausible, although unconfirmed. If this is indeed the case, then Nintendo is doing exactly what it should this holiday: creating options for every buyer, and keeping every cent (Yen) for itself.

So, I’ll say it, and say it proudly: I was wrong about the 2DS. It’s certainly not perfect—the removal of the hinged design makes the system’s two screens considerably more vulnerable to scratching (which is a pastime for young kids), and the bulky tablet design is literally the antithesis of handheld convenience—and it may be needless, but it isn’t worthless. While nothing more than an awkward alternative not worth a second thought to many, for parents and die-hard Pokemon fans, the 2DS is a godsend. And most importantly, it’s a product that will invariably strengthen Nintendo’s grip on the handheld market. Now, if Nintendo could just sort out the damn Wii U.

Austin Wood
Austin Wood
@fanofrootbeer

Social Media Manager
Date: 09/05/2013

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