Nintendo 2DS Won’t Make Up for Lagging Wii U Sales

by Adam Benjamin | August 29, 2013 3:00 pm

Yesterday, Nintendo (NTDOY[1]) bumped its way into the headlines by announcing a new Nintendo 2DS handheld system[2], but the system will have a lot of work to do to make up for the Wii U.

The 2DS takes the selling point of the company’s Nintendo 3DS system — glasses-free 3D gameplay — and throws it in the trash. The Nintendo 2DS can play all the same games as the 3DS, has all the same eShop and WiFi features, except it only displays games in 2D.

The 3DS, by the way, has a slider that allows users to adjust the 3D effects or turn them off entirely, so it’s not like the 2DS is offering new functionality. Instead, Nintendo is pitching the 2DS as an entry-level system for kids younger than the 3DS’s recommend age requirement. It’s also $40 cheaper than the 3DS, and, as Tech Crunch suggests[3], probably the company’s first move toward a small gaming tablet.

The 2DS launches on Oct. 12, the same time as the company’s upcoming Pokemon X and PokemonY titles, which will not be compatible with the older Nintendo DS systems. Now, any DS owners who weren’t keen on the 3DS have a way to get a piece of the world’s second-best selling game franchise.

But will that be enough to save a struggling Nintendo?

The company’s current console, the Wii U, has massively underperformed[4]. As of June 30, the console had only sold 3.6 million units. That’s after eight months where the next-generation console ran unopposed by any new systems from Microsoft (MSFT[5]) or Sony (SNE[6]). In fact, during Nintendo’s Q1, the Wii U was outsold by its seven-year-old predecessor, the Wii.

Nintendo hasn’t budged on its forecast for the rest of the fiscal year, though, and expects to sell 9 million Wii U consoles[7]. The company announced a price drop for the console starting next month, and is hoping that an improving game lineup — filled with franchises like Mario, Zelda and Donkey Kong — will boost sales when the holidays roll around.

We can’t say if that will actually happen, but things obviously aren’t looking good for Nintendo. Even if the 2DS manages to take off and get a boost from the Pokemon franchise, the Wii U is going to face serious competition from the Xbox One and Playstation 4 — each of which have taken great pains to distinguish itself from its predecessor.

So until the Wii U finds its version of GoldenEye 007 or The Legend of Zelda: Ocarina of Time, it’s tough to imagine NTDOY stock moving anywhere but down.

Adam Benjamin is an Assistant Editor at InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities, just the faint hope that Nintendo will get its act together.

  1. NTDOY:
  2. announcing a new Nintendo 2DS handheld system:
  3. as Tech Crunch suggests:
  4. massively underperformed:
  5. MSFT:
  6. SNE:
  7. 9 million Wii U consoles:

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