DSi XL Sales In

According to NPD in this report, the DSi XL pulled in 141,000 sales in March, its debut month. While this may sound impressive, the whole DS line sold 700,800 units for the month. Of course, the DSi XL only had one week for sales. Still, you have to wonder if Nintendo will be recouping the development and production costs any time soon. Especially when they continue to talk up their new handheld, the 3DS, which will have the inevitable effect of continuing to depress DS sales.

It still seems to me that DSiWare offers tremendous potential for additional profits if properly exploited. I think one of the key advantages of the iPod Touch/iPhone/iPad hardware is the ease of buying new software. I may have complaints about how Apple organizes its App Store (or, more precisely, how it doesn't organize it) but they sure make it easy to give them money. Nintendo should be making a lot more on titles where they don't have to create and ship cartridges and packages. They should use this to encourage lower-cost software, and work hard to make the process of buying easy.

Push that hard while you secretly work away on new hardware, and then when you launch the new hardware you'll have an even better online sales structure in place. Yes, the retailers may scream (like they did with the PSP Go), but as long as you can still sell them packaged goods for the platform, they won't complain. Especially if this process can mean more hardware sales...

Nintendo Stomps the DSi XL

Apparently, Nintendo is not content with sticking a knife into the back of the DSi XL launch, as I discussed here a few weeks ago. Now they're looking to cut off its head and bury it at the crossroads, according to this article in Businessweek. They are calling the 3DS the biggest handheld product since 2004, when they introduced the original DS. Translation: Don't buy the DSi XL since the 3DS is the new hotness. In fact, why don't you avoid buying any DSi at all, since this new device is going to replace all of them.

Nintendo must be really, really worried by Apple (certainly not by Sony, as the PSP continues to fade). Why else would Nintendo sabotage its own handheld business in favor of a new and untried handheld that won't even be out for at least six months? Perhaps the clue is that they projected in January that DS hardware sales have dropped 3.8% over the last 12 months, and software sales have dropped 24%.

So I guess their answer is new hardware. I sure hope that the 3D effect works... it seems like an awful big risk to me. A more surefire answer might be to put some effort into the DSiWare store, and perhaps make it easier for developers to get in there. Apple has 50,000 games for the iPhone/iPod Touch... the DSi has perhaps 4000. Average selling price... well, let's not go there.

Not to mention that the DSi is only for playing games, and the iPhone/iPod Touch can do all sorts of other things. Hmm, Nintendo should be worried, but I don't thing putting 3D lipstick on their hardware will be enough to compete effectively in the long term. We'll see, I guess.