Key Takeaways

· Nintendo 3DS launches February 26th, 2011 in Japan and likely a March 2011 release date for North America and Europe.

          · Nintendo 3DS launch price to be ¥25,000 ($299 USD) and will likely launch in North America at $249 to $299.

          · Investment community disappointed by release schedule; EEDAR dissents.

          · A 2011 launch provides additional development time and support from third-parties.

Nintendo Announces 3DS Launch

Today, Nintendo officially announced the launch of their upcoming 3DS handheld platform for one region; Japan on February 26th, 2011. While no official announcement has come regarding North America and Europe, their 4 million unit 3DS expectations worldwide through March 2011 likely represents a March 2011 release date in those regions.

Comments on Pricing

The original Nintendo DS launched at $149.99USD in 2004 (or $173 in 2010 dollars) and ¥15,000, representing an increase in Nintendo’s pricing model for their handheld systems. EEDAR is, however, unconcerned that the initial price-point will discourage consumers. The higher price point allows Nintendo to incorporate new features such as 3D movies, camera, and game support as well as incorporating a more robust online network to aid Nintendo in evolving their product from a single-use, games only platform to supporting the plethora of media and entertainment options that consumers have become accustom to using on their handheld devices such as the PSP, Smart Phones, and Tablet Computers.

Disparity between Investors and Consumers

The industry was anticipating the March 2011 release for North America and Europe; however, general comments from the financial community indicated they were disappointed with the Japan release of February 2011. EEDAR’s opinion differs; we believe that a 2010 Holiday launch would severely impact both the quantity and quality of titles that could be made available by November 2010. EEDAR believes there is both a short term benefit (by not placing a third new device into the holiday line-up for consumers) and a long-term benefit (by allowing publishers and developers additional time to create compelling content) in the selected launch timing for the 3DS platform.

EEDAR believes that Nintendo’s decision to launch in North America and Europe in 2011 has little to do with manufacturing limitations and everything to do with Nintendo’s decision to ensure a strong third-party launch line-up. Historically, third-party launch titles have underperformed compared to their first-party counterparts, which is almost entirely due to the limited development schedules available to third-parties. By allowing additional development time through March 2011, a superior product lineup should be available at launch, something all gamers can appreciate. EEDAR applauds Nintendo and their continued efforts to support the third-party development community.

Lastly, with an already packed holiday season, a Spring 2011 launch of the 3DS hardware and software will provide incremental revenue to the industry and will likely be a catalyst for positive growth both in hardware and software for the first quarter of 2011.