Unless a gamer is content with playing "Angry Birds" all day, playing more interactive games like "Legend of Zelda" or "Resident Evil" on the Nintendo 3 DS (which has the controller) or the Nintendo Wii (with the Wii remote and Nunchuk) is more convenient than the tap-only iPad.

Still, Nintendo, the world's largest maker of videogame machines, has acknowledged the growing popularity of Apple's iPad, iPod and iPhone and the 100,000 games available at Apple's App Store -- but has previously denied that gamers have abandoned traditional consoles or hand-held devices in favor of smartphones or tablets.

But events Thursday prove that Nintendo is acknowledging its woes: it is cutting prices of its 3-D handheld player by as much as 40 percent. Massive price cuts for consoles or devices are regularly done by console makers in order to boost sales of an aging model in the event a newer model is nearing its launch.

However, the 3DS is only five months old -- and Nintendo handheld consoles are supposed to last for years. With the WiiU already set for release next year, Nintendo cut the price of its Wii game system to $150 in May.

40% Price Cut

Nintendo, which released the 3DS only this year in February, will lower the 3DS' price to $169.99 starting Aug. 12, down 32 percent from the $249.99 currently in shelves.

"For anyone who was on the fence about buying a Nintendo 3DS, this is a huge motivation to buy now," said Nintendo of America President Reggie Fils-Aime. "We are giving shoppers every incentive to pick up a Nintendo 3DS, from an amazing new price to a rapid-fire succession of great games."

With the 3DS off to a slow start and poised to become the slowest-selling handheld in the DS lineup, Nintendo has no choice but to cut prices. Nintendo hopes to spur demand and further entice game developers to publish more games for the 3DS.

Aside from the price cuts, Nintendo hopes flagship titles later this year will also boost interest. "Star Fox 64 3D" arrives on Sept. 9, followed by "Super Mario 3D Land" in November, "Mario Kart 7" in December and "Kid Icarus: Uprising" during the holiday season. "The Legend of Zelda: Ocarina of Time 3D" was launched June 19. Capcom Co. began selling a game from the "Resident Evil" franchise for the 3DS this fiscal year.

Shares, Profit Down

Investors, however, are discouraged by Nintendo's prospects. Following the announcement of the massive price cuts, Nintendo shares fell by as much as 20 percent in Osaka trading, the largest stock drop in 20 years.

Kyoto-based Nintendo said net income may total $257 million USD for the year ending March 31, 2012, compared with the previous forecast of 110 billion yen. The Japanese video game company also cut its sales forecast 18 percent to 900 billion yen.

The profit forecast was almost 70 percent below the lowest of the 21 analyst estimates compiled by Bloomberg News. Nintendo's 20 billion yen forecast would result in the lowest profit in more than 25 years.

The cuts will make the 3DS cheaper than the PlayStation Vita portable player that Sony Corp. plans to introduce this year, according to Bloomberg News.

Nintendo cut its annual sales projections for the Wii game console by 7.7 percent to 12 million and lowered the forecast for previous-generation DS players by 18 percent to 9 million units.

Smartphones, Social Games

Apple's iPhone and iPad, as well as smartphones based on Google Inc.'s Android operating system are attracting more gamers with third-party applications. Apple's App Store and Android's Marketplace offer thousands of downloadable games and entertainment apps for free or at a premium.

At a press briefing in April, in response to questions about the gaining popularity of tablet-type devices in the market and the possibility of having a tablet device as Nintendo hardware or a game device, Nintendo President Satoru Iwata said that while the tablet is "an interesting device," Nintendo "never abandoned the + Control Pad and buttons for our game systems because we think these functions are advantageous when creating highly reactive games."

Iwata in April was asked to comment on the fact that social games in addition to mobile games are played mainly on smartphones, are continuing to grow rapidly. He debunked the idea of incorporating social games as a revenue source, and acknowledged that at a time when Nintendo's sales were down, there was a growth in social games and smartphones.

However, he refused to blame the social games or smartphones for Nintendo's lower sales. Iwata noted that according to their research, people who play paid social games have a higher Nintendo DS user rate.

However, this time Nintendo appears to be waking up to reality. Iwata told reporters in Osaka July 27 that Nintendo needed "drastic measures" to lure gamers. Nintendo hopes to trigger "momentum" for the product before the year-end shopping season and expects to meet its previous forecast of 16 million 3DS units, betting the price reduction will improve demand.

Wii U Next Year

Nintendo will have net profit of 20 billion yen this fiscal year but hopes to rebound in the next.

Nintendo Co. will be selling the Wii U, the high-definition video-game console succeeding the market leader Wii, next year.
The device, unveiled at the annual Electronic Entertainment Expo in Los Angeles, California last month, hopes to bring back Nintendo to relevance as it appears like the iPad and other tablets and can still be used anywhere without the need for a TV.

The Wii U, Nintendo's next video game innovation, has a tablet-like touch screen in its controller, provides an option to move the game from being played on TV to the small handheld screen.

Nintendo announced that popular shoot-em-up games like Ubisoft Entertainment SA's Ghost Recon, Sega's Aliens and Electronic Arts Inc's Battlefield 3 will be on Wii U.

Nintendo has sold 86 million units of the Wii console since its launch in 2006, outselling Sony's PlayStation 3 and Microsoft's XBOX 360. It aims to maintain its dominance in the console market with the Wii U.

The Wii U is set to be priced at more than 20,000 yen (US$250) in Japan when it goes on sale next year.

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