Iwata: New 3DS Was Held From The West Until 2015 Due To Production Difficulties

The latest Q&A from Nintendo’s recent investor’s briefing has been translated into English, and it is full of useful tidbits. Among other things, investors asked Satoru Iwata about the state of Nintendo’s digital business, the state of entertainment, and the plans for Wii U and 3DS. One investor asked what many have been wondering: why did Nintendo withhold the New Nintendo 3DS/XL from Europe and North America until 2015? As Satoru Iwata explained, it was due to difficulties in manufacturing and not making enough units for the entire global market.

Regarding New Nintendo 3DS, the quantity that was produced before the end of last year or the amount that was delivered to consumers, was limited, and overseas, in Europe or the U.S. for example, it takes longer than in Japan for the products to be produced in China and to actually arrive and be lined up in stores. Hence, we had to make a difficult decision on whether it was acceptable or not to cause a worldwide shortage of New Nintendo 3DS. As a result, (based on the different diffusion levels of the preceding models,) we made the decision to launch it in 2015 in Europe and the U.S.

He elaborates that Nintendo may have been mistaken in leaving out key markets for the critical holiday season, and that New 3DS may indeed have made selling the Wii U a lot harder in Japan, where the console has sold the least.

In hindsight, the actual results and the reactions to the launch of New Nintendo 3DS tell me that you are absolutely correct in assuming that the results would have been different if it were launched within 2014. In addition, the fact that putting effort into attracting attention to New Nintendo 3DS became an obstacle to selling Wii U in Japan has made us once again understand the difficulty in staggering the sales peaks. We have many issues to reflect on, and I think we could have tried harder.

This answer was part of a larger thread about how effective Nintendo’s marketing approach has been, namely the lesser importance of television advertising and more reliance on social media. Iwata believes firmly that their products will sell based on their high quality at any price, not simply because they spend a lot of advertising dollars.

…I believe that although the traditional practice of selling things and the belief that products will sell well if you advertise broadly and make attractive discount offers, worked five or ten years ago, it is no longer applicable in this present day.

Consumers will purchase high quality products even if they are expensive, or in other words, even if there are slightly reasonable discount offers, consumers will not purchase products unless they truly understand and are satisfied with the quality. Also, product appeal must be properly communicated to consumers, but advertisements that are pushed on consumers are gradually losing their effect, and we have to take the approach that encourages consumers to retrieve information at their own will. We are in the middle of such changes, and I think that completing this transition process will be one of the prerequisites for regaining Nintendo-like profits by the fiscal year ending March 2017, which I previously mentioned.

This also explains, to a degree, why Nintendo has not continuously slashed the price of their hardware, in the face of smart devices gobbling up their wider audience. Such a move would mean twofold: that the product is not worth its standard MSRP, and that the components of the 3DS (and especially the Wii U) have not dropped in price enough that a discount to consumers would be profitable.

For all the speculation, Mr. Iwata’s explanation behind why the New 3DS had to wait worldwide until 2015 seems downright reasonable. However, not everyone will be satisfied by Nintendo’s cautious manufacturing output, as seen by hardware and amiibo shortages of late. What do you think of Nintendo’s decision to hold off the New 3DS in the west? Do you think it hurt their bottom line or were you just irritated by the waiting game?

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A man with a plan. My favorite video game franchise is Pokemon, but his favorite video game is Resident Evil 4. I can also tell you trivial cartoon factoids.