Nintendo's Iwata: 3DS momentum in the U.S. is weak

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Nintendo's 3DS portable gaming device is struggling to gain traction in the U.S. and European markets, the company's president Satoru Iwata conceded during its annual shareholders meeting.

Nintendo 3DS

Nintendo's 3DS struggles to gain traction in the U.S. and Europe.

Although the 3DS generates 55 percent of all gaming hardware sales in Nintendo's native Japanese market, "sales momentum in the U.S and Europe is currently weak," Iwata said. In recent years, the portable gaming segment has taken a severe beating at the hands of smartphones, tablets and media devices like Apple's (NASDAQ:AAPL) iOS products, which offer access to downloaded titles priced at a fraction of the cost of conventional videogames. App store analytics firm Flurry reports that at the end of 2011, Nintendo DS yielded just 36 percent of portable gaming revenues in the U.S. while rival Sony PSP declined to 6 percent, far behind iOS and Android at 58 percent. Nintendo DS and Sony PSP revenues combined plummeted from $2.2 billion in 2009 to $1.4 billion in 2011, Flurry added.

"Considering that the U.S. and European markets are larger than the Japanese market in terms of the size of the population, sales in the U.S. and Europe are supposed to be larger. At the year end of 2011 the sales momentum in those markets increased in the same way as in Japan; however, the sales pace went down after the beginning of 2012. As a result, the sales proportion of the Nintendo 3DS is now about 20 percent of the total video game sales in those markets."

Nintendo launched the original 3DS in early 2011 in an attempt to resuscitate the portable gaming market. Next month, the company plans to introduce the 3DS XL, a revamped version of the 3DS touting a touchscreen 90 percent larger than its predecessor. Priced at $199.99, the Nintendo 3DS XL is slated to go on sale across North America Aug. 19, the same day the gaming giant will release New Super Mario Bros. 2, the latest installment in its signature Mario series. Iwata said Nintendo will rely on the 3DS XL and key game franchises to "create sales momentum which can wipe this type of [sales] concern away at an early stage."

For more:
- read this Nintendo shareholders meeting transcript

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