3DS is a Huge Success! Who knew?

In a press release offered today the last great bastion of Japanese gaming, Nintendo, announced that its latest handheld, the 3DS, has sold better than any other console in the companies history. If you find this shocking, you probably are not alone. In fact, just about six months ago Nintendo was talking about the poor system sales, and how bad the game lineup was. Apparently though, after huge price cuts, the system has rebounded nicely.

So what does this really mean? For one, it means that Nintendo still knows what it is doing, at least mostly. The have only ever released one mobile console that failed, the dreaded virtual boy, and has a great track record in the recent past. This also means that Nintendo is still dominating both the home console, and the mobile console gaming markets.

Next, it reinforces the importance of price point. We saw what happened when the PS3 launched at a price point too high, and it took 3 years to rebound. It looks like the 3DS suffered from the same problem, but Nintendo saw it and corrected it in time. Nintendo might not be making a lot on the unit right now, it cost about 103.00 USD to manufacture, but they should make it up with software sales and licensing fees. The figures just reinforce that the entry price has to be just right for mass market consumption for consumer electronics.

It also means that the Vita, which launches in just a few days, may be in big trouble. It has already seen poor sales in Japan, and the market just seems all the more crowded with this newest press release from Nintendo. The Vita is coming out to compete with the 3DS, not to mention every smart phone and tablet out there, and there is some major concern about the avaibilty of market share for the device. I think they might be okay because they are aiming for a different base than the 3DS, but wallet share is pretty limited today.

All and all this seems to be great news for Nintendo, and validation in their risk with the new handheld, and just one more reason for Sony to sweat for the next month.