Email: Nintendo’s new handheld

Dear Mr. Malstrom,

I do not understand why Nintendo is releasing another handheld console so soon.  The DS broke several sales records in 2009, and a new DSi model is being released in North America this month.

You said recently in your blog that you think that they are trying to pre-empt Sony, but I don’t see why Sony is even a serious threat anymore.  Every thing they’ve done for the past several years has been made of fail.  The PS3 took them from first place to last place in home console sales.  The PSP gets fewer games every year, and the PSPGo is a total joke.  The PS Move is going to alienate the few customers they have left.

On the other hand the DS is still selling like no tomorrow.  It seems like the biggest threat to Nintendo’s success is Nintendo itself.  Why would they announce a new handheld while people are still buying the DS in droves?  Wouldn’t they benefit more from waiting an extra year or two?

Thanks in advance for any reply you give.

The most vulnerable time for a console manufacturer is during transition. And what always happens is that if a new console is released a year after a competitor, then that means the competitor has had a year to get third party development used to the system. They will be less likely to get used to your system.

When SNES came out, Genesis was already years into its existence and had most third party development used to the system. It made it extremely difficult for the SNES to catch up. If it wasn’t for Donkey Kong Country (a poor substitute for Super Mario Brothers 5), SNES would have likely lost to the Genesis.

The N64 was delayed while the PlayStation came out. Being behind gave Sony the advantage in third party development.

The Gamecube came out one year after the PlayStation 2. In that one year, developers got used to the PlayStation 2 and didn’t really get into either the Gamecube or Xbox. But the time Gamecube and Xbox came out, PS2 games were being cranked up. Since console sales are avalanche based, Gamecube and Xbox could never hope to keep up.

It is a standing ‘order’ from Iwata to never release a console late when a competitor does. So why were the N64 or Gamecube ‘late’? It is probably because Nintendo thought that since with that extra year, the N64 and Gamecube would be ‘better graphics’ and would blow away the PlayStations. This ended up not the case. And it taught Nintendo that graphical superiority doesn’t matter.

Microsoft understands the issue of timing which is why they unceremoniously dumped the Xbox and made sure the Xbox 360 came out a year before the PS3. From the Microsoft perspective, that worked since the 360 is the prime ‘HD’ console where most games are developed for.

It may appear Nintendo is throwing away sales of an already perfectly good DS. But these Japanese companies think far ahead in the future than we do. From their perspective, billions of dollars are at stake. If they don’t launch when their competitors do, Nintendo might end up with another Gamecube or N64.