Shares of Nintendo (OTC: NTDOY) hit a five-year low yesterday, as the struggling Japanese gaming giant continues to stumble after last week's shocking price cut on its relatively new handheld system.
Remember when Nintendo was bragging about 3DS breaking the company's one-day sales record after its March debut? It seems that things have been dead since early adopters gobbled up the next-gen system.
"Is it odd that at $250, its 3DS handheld gaming system may be selling for nearly twice as much as its larger console," I asked earlier this year, when Nintendo slashed the price of its Wii gaming system to $150.
Apparently I wasn't the only one seeing it that way. Nintendo's 3DS will shave its price down to $170 in eight days.
In order to keep its loyal gamers happy -- and to make sure that retailers don't laugh at anyone trying to buy a 3DS between now and next Friday -- buyers who have paid or will pay $250 for a 3DS will get 20 free digital downloads of earlier handheld classics.
It may be the one smart ambassadorial move that Nintendo is making in this quick-trigger response, and Sony (NYSE: SNE) isn't laughing.
We can't forget about Sony. It plans to roll out Vita -- its new handheld -- in a few weeks. Sony wowed gamers during June's E3 powwow, but how popular will the entry-level $250 price be now? At least Nintendo can now claim that its handheld is cheaper than Apple's (Nasdaq: AAPL) $230 iPod touch.
It's at this point where die-hard gamers will begin shaking their heads. How dare someone compare the rich $40 3DS handheld games to the ad-supported freebies and $0.99 diversions that folks can download on their iPods or smartphones? Well, it can't be a coincidence that the growing success of Apple's App Store just happens to be taking place as Nintendo and Sony face waning interest for their handhelds. Why did Sony team up with mobile partner Ericsson (Nasdaq: ERIC) to put out the Xperia Play gamer-centric smartphone this year? Why has Microsoft (Nasdaq: MSFT) -- now the top dog in traditional consoles with its Xbox 360 -- steered clear of the handheld systems?
The specs on the Vita are superior to some of the 3DS novelty features, but if gamers balked at $250 for the 3DS -- and developers failed to fill up the pipeline with early titles worth buying -- can Sony afford to hit the market at $250 for its Wi-Fi Vita and $300 for its 3G model?
It looks like Sony's been thrust into another pricing war before it even suited up for battle.
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