The New Nintendo 3DS XL Analysis

 In Analysis, Nintendo

MH 4 Ultimate-SJAN. 20, 2015 • The new Nintendo 3DS XL is another salvo in the crowded battle to deliver portable devices into the hands of consumers.  Of course, the difference is this is part of the incredibly successful Nintendo line of portable products and is a successor of the original DS, the major pioneer of touch screen gaming and a clear inspiration for the iPhone/iPad line of products.

DFC Intelligence analyst David Cole recently paid a visit to Nintendo to get some hands on time with the system and get a sense of its market potential. The conclusion is that the 3DS XL is a compelling system at an attractive price, but whether it can reach an audience beyond core Nintendo fans remains to be seen.

The 3DS launched in early 2011 as a platform for the most part designed to succeed the DS which had launched way back in 2004 and gone on to become the most successful gaming portable system of all time with over 150 million units sold. The 3DS XL was quietly launched in summer 2012 as basically a more expensive alternative to the 3DS whose main feature was a larger screen.

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DFC argued at the time that if Nintendo had spent more money on marketing the 3DS XL it could have garnered much more attention. As it is, by late 2014, the 3DS XL had sold about 17 million hardware units out of a total 45 million 3DS systems. This was much better than the lower end (and confusing) 3DS 2DS which had sold less than 3 million units in the same time period. However, clearly the core 3DS was the leading system of this line of products.

The new Nintendo 3DS XL launched in Japan last October and is coming to the U.S. and Europe on February 13, 2015 at a price of $199.99/€199.99. This is only a $30 premium over the core 3DS and as such is a fairly attractive price (the poor selling 3DS 2DS is $129.99). The system already launched in Japan in October and quickly became a bestseller accounting for a significant majority of 3DS units sold. However, that type of success in Japan does not necessarily translate to Western markets.

The new 3DS XL of course has a larger screen than the core 3DS (4.88 inches versus 3.53 inches), but it also adds some new buttons, most notably an analog “C” stick on the right hand side. This is a feature core gamers had been demanding for quite some time.  The 3D feature of the system is also a notable improvement with the ability to track facial movements.

All existing DS and 3DS titles will be able to play in the new 3DS XL.  However, there are some titles that will ONLY be able to play on the new system, the first of which is Xenoblades Chronicles 3D. Another interesting note is that the new 3DS XL does not come with a charger. This clearly implies that Nintendo is targeting this system for pre-existing owners of the 3DS family. There is also the possibility for some confusion at retail with titles that cannot play on existing systems and which systems will need a charger.

In terms of software, the main focus at launch will be on two titles: the Legend of Zelda: Majora’s Mask 3D and Capcom’s Monster Hunter 4 Ultimate. Both titles launch with the new system on February 13 with Monster Hunter 4 getting a bundle at $229.99. The two products are quite different. Majora’s Mask is an update of a hit 2000 Nintendo 64 title and should appeal to old school Nintendo fans.

The Legend of Zelda: Majora’s Mask 3D special edition case.

The Legend of Zelda: Majora’s Mask 3D special edition case.

Meanwhile Monster Hunter 4 is the latest in a franchise that has been a massive success in Japan but has struggled to find an audience in North America and Europe. Nintendo is clearly hoping that, like Pokemon from the late 1990s, Monster Hunter will be another sensation that crosses the Pacific. At the time, Nintendo was reluctant to bring Pokemon to the U.S. thinking its Japanese sensibility would not translate. Of course, billions of dollars later we know that is not the case.

Another major title Nintendo was focusing on was Code Name: Steam, a quirky turn-based strategy game that has 19th century characters like Abraham Lincoln and Tom Sawyer battling an alien invasion. Once again this type of title appeals to a different Nintendo audience, mainly consumers who appreciate franchises like Fire Emblem and Advance Wars.

In summary the new Nintendo 3DS XL is a compelling system for consumers that are already into the Nintendo line of portable products.  Nevertheless, at this point it is hard to see this system bringing new consumers into the party, but that could change should Nintendo choose to conduct a significant marketing campaign next fall. Right now DFC Intelligence will be slightly raising its forecast for total 3DS sales but we are not expecting any major market changes at this point.

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