The Nintendo 3DS and Historical Handheld Pricing

The Nintendo 3DS is set to arrive in the US on March 27th, with Europe on target for March 25th. We first saw the handheld console at the 2010 Electronic Entertainment Expo wowing audiences with its glassesless 3D gaming--quite the feat considering that even nonportable game platforms have only begun to provide 3D gameplay that require expensive glasses and 3D HDTVs.

The Nintendo 3DS features a glassesless 3D LCD, a 3D camera, a faster processor, and the touch screen that made the DS what it is. All the new technology the 3DS is sporting certainly comes with substantial costs. Nintendo announced that Japan pricing for the console would begin at ¥25,000. Using current exchange rates, that would put the 3DS at roughly $300. Instead of going with a direct conversion, Nintendo priced the handheld at $250 in the US, and retailers in the UK are listing it at £229.

Taking a trip down memory lane with Nintendo's previous handhelds we see one basic trend. If we throw out the outlier that is the Virtual Boy, Nintendo largely stuck to sub-$100 price points until the Nintendo DS was released. At that point the company moved up to the $150 and $170 ranges, with the DSi XL at $190. The Game Boy Micro was an update to the Game Boy Advance, hence its lower price point.

Inflation-Adjusted Prices

However, once we adjust for inflation, Nintendo's pricing trends show that the company started around the $150 to $170 range and then iterated its products to make them cheaper. This holds true until we get to the Nintendo DSi XL, which got more expensive, although the DSi XL does have larger screens that add to its cost. The Game Boy Advance series hung around the $120 price range.

With the Nintendo 3DS priced at $250, it's a clear departure from Nintendo's previous pricing strategy. The last time the company came close to that price point was with the Virtual Boy, which by all accounts was an abysmal failure (770,000 units sold) compared to any of Nintendo's handheld successes. The original Game Boy and its successors sold 118 million units. The Game Boy Advance family moved 92 million units. The Nintendo DS and all its variants, by far the most successful, have a combined 135 million units in the wild. But to say that the Virtual Boy failed due to its price point would be incorrect (it had more than its fair share of flaws), as many other consoles with equally high price points have seen success.

The article contains updated text and graphs to reflect Nintendo's official pricing.

Handheld Launch Prices

If we look at the ecosystem at large, Nintendo isn't alone in moving to higher price points. Most recently, Sony launched the first iteration of the PSP at $250. Subsequent models moved the price down to $170, at which point the PSP Go moved the sticker back up to $250.

Inflation-Adjusted Handheld Prices

Going back to the 1990s, we see more than a few handhelds pushing above $250 once we adjust for inflation. Aside from high price points, all of them also shared one common trait--ridiculously short battery life. The Turbo Express would chew through six AA batteries in three hours.

The gaming audience is much broader than it has ever been. However, competition comes from many sources now. Nintendo owned the handheld gaming space uncontested for more than 15 years. But from 2004 onward, it has faced new competition from a few likely and unlikely sources: Sony, Apple, Google's Android, and Microsoft's Windows Phone 7. When the company launched the Nintendo DS, it didn't have too much to deal with. This time around, Nintendo realizes that it has to fight for pocket space against a sea of worthy competitors.

2011 will be a very exciting year for handheld and mobile gaming. Along with the release of the Nintendo 3DS, Sony will bring the PSP Phone and likely the PSP2. Apple will likely update the iPod Touch, iPhone, and iPad later in the year. Nvidia's Tegra 2 chipset will also find its way into a slew of Android-based phones and tablets. They all share one common element. None of them will cost less than $200.

The article contains updated text and graphs to reflect Nintendo's official pricing.