Tough Road Ahead • Page 2

Naysayers are speaking too soon on the 3DS - but that's not to say it's all looking rosy for the system.

There are other factors to consider with regard to the system's slightly disappointing first month. While some of them - such as the Japanese earthquake, which has undoubtedly depressed demand in this market - are far from Nintendo's control, others speak to bigger problems that the 3DS will face in the coming months and years.

The most notable, in western markets at least, is that Nintendo has - perhaps foolishly - drawn attention to the biggest challenger of all by launching the 3DS in the same window as Apple's iPad 2. The comparisons are not flattering; Apple's much more expensive (albeit far more multi-purpose) device remains extremely difficult to acquire, with tools springing up online to track shipments to stores so that customers can line up in advance. This, it might be added, for a device that's little more than a logical iteration - adding a camera, slimming down the form factor, boosting the power, but not making anything like the dramatic change represented by the 3DS' functionality.

Nintendo has the most enviable library of IP and arguably the most talented pool of developers in the games business. It has a warchest of literally billions of dollars.

Apple's success, though, points an accusing finger right at a ball which Nintendo has fumbled and dropped repeatedly in the past few years - online. There was a lengthy period in which online functionality was talked about in vastly inflated terms, trumped as the next big thing despite being of interest only to a niche audience - and at that time, Nintendo's cautious, slightly sniffy attitude to online was laudable and sensible. Or so it seemed; now, with online capabilities being a fundamental part of both core and mass-market gaming, both in terms of distribution and functionality, Nintendo's holding out on online systems seems more like stubbornness than intelligence.

It's not that the 3DS doesn't do online - it does, and it even innovates to some extent with features like StreetPass and SpotPass. However, the fact that it launched without the most basic part of its online content offering, the 3DSWare store, even being online, tends to suggest exactly how much emphasis Nintendo places on this aspect. The continued use of Friend Codes, meanwhile, almost certainly robs the system of the ability to do straightforward things like adding friends directly from social network contacts.

None of this, of course, is essential functionality for playing games, and Nintendo and its fans can fall back on that argument very successfully. Make a great game for the 3DS, and it won't hurt the experience one bit that the online offering is weak - developers can work around it, and plenty of vocal gamers will actually prefer to see a console that doesn't dig its claws into their social networking sites, no matter how convenient (and commercially sensible) that functionality may be. Moreover, Nintendo knows that a major part of its audience is more interested in local play than online play anyway - PlaygroundPass, perhaps, might have been a more honest name for StreetPass, since it's in schools that the system is likely to be of most value.

However, in the longer run, there's a clash of philosophies evident here which goes far past in-game functionality. If you buy an iPad and bring it home, you can immediately start downloading game software for the device - filling it up with tons of surprisingly high-quality titles for only a few pounds or dollars each. Buy a 3DS, however, with the same budget to spend on games, and you'll get one game title in the shops - and have to return to the shop to get your next one. Compared with what's available elsewhere, the system's software doesn't just look expensive - it looks poor value and inconvenient.

Apple is just a relevant example of a company that understands this and is pushing firmly in this direction. Microsoft and Sony know, too, and it's evident which way the wind is blowing for them - without actually losing their focus on the big-budget AAA titles on which their markets are founded, they are increasingly allowing download games and lower-priced titles to take a place in the centre stage. Expect to see this reinforced as more details of Sony's NGP emerge in the coming months.

All of which leaves Nintendo in a tough position, as has been argued many times before - but it's important to remember that it's a tough position occupied by an even tougher company. Nintendo has the most enviable library of IP and arguably the most talented pool of developers in the games business. It has a warchest of literally billions of dollars - an asset pool so large, in fact, that fluctuations in the values of the Dollar and the Yen can create paper profits and losses that totally obscure Nintendo's (enormous) operating figures on its balance sheets. It has superb recognition in the kids and family markets as well as a dedicated audience of veteran gamers.

3DS was always going to be an uphill struggle - a product that feels, for all its 3D wonder, like it belongs to a bygone era, one which we left behind when smartphones and tablets started to dominate the public consciousness. I maintain my view that it will never reach the sales peaks achieved by the original DS platform - but it's far too early to call "crisis" on this console, or on Nintendo's strategy, just yet. The real test will come in six months - when a console with more heavy-hitting software will face its first Christmas sales period. Only if the 3DS falls at that hurdle will it be reasonable to start seriously worrying about where Nintendo goes from here.

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