The new 3DS price means that Nintendo will be taking a hit on every system sold. But increased hardware and software sales should make the losses worthwhile.
So what about Nintendo's partners? During a Q&A session at last week's Tokyo investors briefing, Nintendo CEO Satoru Iwata was asked about the effects of the price drop on third party software publishers and retailers.
For third parties, the hardware price was a hurdle, replied Iwata. Publishers were saying things like, "Even if they are interested in this game, they can't buy it," or "We placed a big bet that the 3DS would sell without question, and are a bit disappointed." These same publishers are now saying "We're extremely relieved" and "This will definitely sell."
For retailers, Iwata admitted that the lower 3DS cost means that retailer profit margins will also go down. While Nintendo cannot do anything about this, Iwata said that retailers will see benefits from the overall expansion of the 3DS business. One retailer from America (Iwata would not share the name) was so pleased that he said "It's like Christmas has come early!"
Retailers who stocked up on the 3DS system at the old price won't be incurring losses. Nintendo is holding a "Price Protection" program where it will be refunding the difference in price.