Is Nintendo Jumping The Gun? (NTDOY, AAPL)

Should Nintendo hype the launch of a new console while the 3DS is still in its infancy? For all intents and purposes, this is the perfect time to hype the Wii's long-awaited successor. Up until recently, Nintendo (NTDOY) released new hardware every five years. This became the industry standard. While the presumably titled Wii 2 is not due until 2012, console manufacturers tend to announce their devices several months in advance. This, however, is no ordinary time for Nintendo. Whereas the Game Boy, Game Boy Advance and Nintendo DS were met with universal success, the Nintendo 3DS is currently sitting on store shelves, waiting to be purchased. Reggie Fils-Aime, the President of Nintendo of America, claims that this is the result the company wanted. “I would characterize it as a launch where we learned significant lessons from the launch of Wii and we made sure to have not only ample supply in the marketplace, but we staged supply so it would not sell out,” he told USA Today this month. That's a great way to spin a bad situation, but the reality is that people are not as excited by the Nintendo 3DS as they were last June when the system was unveiled. At that time, the whole world was in awe as the Mario-maker delivered the world's first glasses-free 3D device. If Nintendo had released the system last summer, it could have easily sold every unit available. But that's not the way the game industry works. In that industry, console and handheld manufacturers give consumers plenty of time to think about their purchasing decisions. Can you imagine what the world would be like if Apple AAPL used this strategy? Make no mistake: Steve Jobs had no intention of allowing consumers to second-guess their iPad 2 desires. That's why the device arrived immediately after its unveiling, ensuring that we were given the chance to purchase it at the peak of Apple's hype. Oh what a different world we would be in today if Nintendo developed new hardware with that same mentality. To be clear, the iPad 2 is merely an upgrade while the 3DS is a whole new system. But the iPad 2 follows a device that sold around 15 million units; the 3DS follows a device that sold more than 100 million units. With that many potential buyers already in Nintendo's hands, the 3DS should have blown away the iPad 2 in North America and in Japan. One could argue that Apple is just playing games with iPad 2 shipments to ensure that the device continuously sells out. However, Nintendo is the king of shipment games; up until the Nintendo 64 was released, there was no such thing as a console shortage. But there has been one with nearly every console since that time. Right now, consumers can walk into any Best Buy BBY and pick up a Nintendo 3DS right off the shelf. That is a sad reality, to say the least. What's even sadder is that those who do buy the system are having a difficult time finding new games to purchase. While most system launches are weak, Nintendo typically releases new hardware with at least one big game. That was not the case with the 3DS, which will not have its first major release, The Legend of Zelda: Ocarina of Time 3D, until June. For those of you who don't play video games, Ocarina of Time 3D is a port of a Nintendo 64 game that was released in 1998. It's not exactly the fresh, cutting-edge software that consumers have come to expect from Nintendo. While there are a few decent games in the pipeline, the 3DS won't see its first major “new” release until Super Mario 3DS arrives in the fourth quarter. Whether or not the game will come out on time is anyone's guess. With so many question marks surrounding the 3DS (and so many units left to sell), it almost seems foolish for Nintendo to refocus its attention on a new machine. While the company should be applauded for planning to release a new home console in 2012, it should not do so at the expense of an existing device. The problem is that, even if the 3DS proves to be the most exciting system at the 2011 Electronic Entertainment Expo, it is now destined to be overshadowed by a console that won't be released for 18 months. That's a good way to get a lot of hype. But if consumers aren't there when the dust settles in 2012, what's the point?