A big gamble?

The upcoming release of 3DS XL, the sizeable update to the original model, is hardly a surprise. Nintendo has constantly iterated its handhelds in an effort to attract more consumers and, to put it bluntly, make a lot of money: we can’t even argue that the XL is arriving earlier than expected, as the gap between the original DS and the vastly improved DS Lite was of a similar length. Let’s not forget that the same DS hardware, give or take an adjusted processor to handle the DSi Shop, had four iterations; that was just one system.

There are a number of reasons why releasing 3DS XL now makes sense, but equally there are circumstances that make its release questionable. In the same way that we looked at the pros and cons of 3DS XL, let’s have a look at both sides of this argument.

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The timing is right

As we’ve suggested elsewhere, Nintendo is targeting the XL at the same audience that bought and loved DSi XL. The accompanying game releases such as New Art Academy in Europe and New Super Mario Bros. 2 will sweeten the deal for those that want a larger, more comfortable viewing experience.

Another circumstance of the release timing is that it keeps Nintendo in the headlines over summer months that, typically, suffer a drought of exciting must have gaming experiences. While rival companies await the standard October/November madness that brings many triple-AAA monsters into shops, Nintendo will have been happily selling an updated console and a Mario title in the meantime. Let’s not forget that Wii U will also be fighting for shelf space in the run-up to the holiday season, so it was really a case of now or 2013 for this system.

We’d also speculate, based on recent comments from Satoru Iwata, that the XL has the potential to be profitable from day one. A big issue that the original model faced was the high retail cost, followed by a per-unit loss after its drastic price cut. We know that 3DS will become profitable within a matter of months, and Iwata’s latest statement that Nintendo will return to profit by the end of the year suggests that, despite competitive pricing on the XL model, a profit will be made on the trade price. No doubt the company has made the manufacturing processes more efficient, and as the only changes to the system are bigger screens, a larger casing and a few amended button designs, it’s possible that Nintendo has struck deals to buy the parts at a sufficiently lower cost.

If the system can attract new consumers — as well as those that feel the need to upgrade — with a steady profit on each sale, then Nintendo could ensure a money-spinner to boost the bank balance ahead of, what it hopes will be, a successful home console launch later in the year.

The timing is wrong

Those are some positive perspectives, but there are arguments to say that, on this occasion, Nintendo should have ignored precedent and held back on a new iteration. Many of these points actually counteract those above, but are equally valid.

The big question mark surrounds the current retail market, and whether the XL will struggle to gain momentum. It’s possible that the design and new game releases will attract big sales, but it’s equally possible that Nintendo is pushing the device into an economy without enough demand. Whether you follow the ins-and-outs of global economies closely or not, it’s a basic fact that many people have less money to spend than they did five years ago. What worked for the DS family of consoles won’t necessarily work today, because circumstances have changed.

Of course consumers have a cheaper alternative with 3DS, but if that cheaper option leaves 3DS XL boxes sitting on shelves, no amount of profit margin on each unit will rescue the situation: Nintendo is investing in marketing and distribution for these handhelds, so it’s relying on the demand existing for both models. Let’s remember that 3DS is only just selling in numbers that can be considered a qualified success, and it’s also arguable that without big Japanese sales to boost figures, the handheld would still be struggling.

Another counter-argument to the positive side is the assertion that the XL is filling a gap as Wii U prepares to launch. On the flip-side, it’s launching just months before a new home console, which will be yet another demand for a big investment from consumers. This has also been done before but, for the reasons outlined above, it’s possible that some will hold off on an XL because they can only afford Wii U, or vice versa.

As you may have noticed, a big theme of this feature has been money. Nintendo wants as much of it as possible, and consumers no doubt wish they had more to spend. Pointing to previous examples of successful iterations of DS, GBA and Game Boy both proves and disproves the logic of releasing 3DS XL now. The only change is in size – no second Circle Pad, we know – so the question remains whether this new system will sell enough to be deemed a success.