Opinion: Nintendo Clears A Path For Apple To Take The Lead? 2

[Analyzing this week's Nintendo 3DS launch and pricing announcement, Gamasutra's Chris Morris suggests the company has only "given Apple a chance to get even more entrenched in the gaming world".] It was pretty hard to find anyone who liked Nintendo Wednesday afternoon. Loyal fans were upset to learn they’d have to wait longer than expected for the 3DS. Nintendo investors were ticked that the company abruptly changed its fiscal 2011 earnings guidance. And, of course shareholders of other publishers were annoyed, since Nintendo’s subsequent share price woes were noticed and brought the entire gaming sector down on Wall St. But the party was going strong at 1 Infinite Loop in Cupertino, Calif. With its announcements this week, Nintendo has given Apple a chance to get even more entrenched in the gaming world – and the early pricing on the 3DS suggests the iPhone and iPod Touch could have plenty of time to expand that footprint. Let’s get a few things out of the way, first. The Japanese price tag of 25,000 yen doesn’t carry a lot of weight in the U.S. or Europe. While there was a lot of Sturm und Drang about that price meaning the 3DS will be a $300 handheld system when it hits our shores, analysts don’t expect the company to carry that price tag to other territories when the system launches in March. $250 is the current odds on favorite. That’s still pretty high, though. And the launch of the 3DS is vastly different than any previous Nintendo handheld. The company’s not only rolling out a technology that the mainstream audience has waxed and waned over for (literally) decades, it’s doing so in the most competitive market in its history. Amidst all this, the 3DS seems to be stuck in something of an identity crisis when it comes to identifying its target audience? Is it younger gamers, who have traditionally made up the base of the company’s handheld division? Is it adults, who are part of the Game Boy generation and whose loyalty to Nintendo is still strong? Or is it a continuation of the outreach to lost gamers and non-gamers that has served the company so well for the past six years? The company, of course, would say all of these – but there are hurdles with all three. If it’s kids, parents are a lot more willing to spend $150 for a game system than they are to spend $250 or more. The 3DS – initially, of course – could price itself out of the parental comfort range. Another strike is that while there’s no hard medical evidence, the perception remains among the public that children under 7 should avoid 3D altogether since it can strain the still developing muscles in their eyes. If it’s adults, Nintendo is asking them to spend the same amount on a single use device as they would for something that’s multifunctional. Both the iPhone 3GS and iPod Touch are cheaper than the 3DS’s expected launch price – and do a lot more than play games and take 3D pictures. And those Blue Ocean lapsed- or non-gamers? They’re the same people who only have interest in 3D when it’s a marquee event – like an Avatar. So far, there’s nothing on the radar for the 3DS software lineup that’s likely to lure that demographic. Regardless of the audience Nintendo plans to chase, Apple has a chance to gain a lot of ground. Yes, the DS is the default handheld system of this generation – with 132 million in people’s hands. But it had a three-year head start on Apple’s devices – and Apple is closing fast, with 100 million iPhones, iPod Touches and iPads sold since 2007. Plus, Apple only recently realized the gaming potential of its devices and begun marketing campaigns around that. Are Apple’s products and the 3DS mutually exclusive? Of course not. There will certainly be a segment of both the gaming world and the mass market that buys both. What Nintendo needs to worry about though, are people who put off purchasing the 3DS until the price hits their comfort zone. That gives Apple an even longer window to beef up its gaming offerings. The longer Apple can keep people distracted from the 3DS, the shakier third-party publisher support for the system will be. Publishers chase installed bases – and don’t care who makes the hardware. All of this said, Nintendo does have a couple of things working to its advantage with the 3DS – beyond the curiosity and coolness factor of a glasses-free 3D device. An early 2011 launch gives the company plenty of time to sell to the core audience and early adopters and still drop prices by the time the holidays roll around, to make it more appealing to the mainstream. Granted, that’s not the most likely of moves, but if you don’t see ongoing retail shortages and at least the perception of the 3DS being the must-have gaming device of the year, it’s something that could be thrown into consideration. Also, the timing of the launch lets Nintendo and third party partners put together a robust software lineup for the 2011 holiday season. Ultimately, Nintendo knows the fight the 3DS faces is the same one the DS faces: convincing customers to pay $30 or more for its titles, when they can get things like Angry Birds for a buck. At its core, the 3DS has a good hook. And its long-term outlook is as solid as it ever was. But some unfortunate timing and pricing decisions – regardless of the reasoning behind them – could dramatically impact Nintendo’s quest to remain king of the handheld gaming mountain. [Chris Morris is Gamasutra's editor-at-large, and has covered consumer technology and the video game industry since 1996, with high-profile columns including CNNMoney's well-known 'Game Over' commentary column. He's written for outlets including Variety, Official Xbox Magazine, CNBC.com, Yahoo! Games and more.]