Nintendo takes drastic action as handheld struggles

Nintendo executives have slashed their own salaries as well as the price of their fledgling handheld console after the company's first quarterly operating loss.

The poor reception to the 3DS - this year's follow-up to the DS in Nintendo's hugely successful handheld line - has been blamed on a poor selection of titles and unexciting technology.

It has also raised awkward questions about the viability of the handheld market which now faces increasing competition from smartphones.

President Satoru Iwata, who has taken a 50 per cent pay cut, told shareholders a "drastic approach" was needed in order to build momentum for the 3DS.

"It is quite unusual for us to change the price in less than half a year from a product’s launch," he said.

"Once momentum is lost, great power is needed to change that trend."

The price of the 3DS will be slashed by $100 down to $249.95 in Australia from August 12.

Nintendo says early adopters who may feel betrayed by the move will receive free game downloads to compensate.

The company is now banking on those price cuts, as well as the release of highly anticipated games Super Mario 3D Land and Mario Kart 7 later this year, to boost the console's flagging fortunes.

But Mark Serrels, editor of Australian gaming website Kotaku, says it isn't yet known if Nintendo's troubles were caused by the 3DS itself or the changing handheld market.

"The problem with the 3DS is quite multifold. The technology isn't really cutting edge; it does the 3D sort of gimmick that some people don't really like or approve of; and there's a problem with the games," he said.

"There's a lot of problems that are over and above the smartphone getting involved in that market."

Serrels says we will know how serious the crisis is for the market when the Vita - PlayStation's successor to the PSP - begins its launch later this year.

A luxury

But the challenges posed by smartphones, including Apple's iPhone and Google's Android, are obvious.

Owning a Gameboy or equivalent used to be essential for portable gaming during commutes on buses and trains, but for those with smartphones, it's now an often unnecessary luxury.

Serrels says Nintendo probably won't see success on the same scale as the DS, which has sold more than 125 million units worldwide, but he wouldn't count them out.

"Nintendo really are at their best when they're doing something that you would never have expected," he said.

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