Struggling Nintendo announces 2DS handheld, cuts Wii U price

These are desperate times for Nintendo, and so the game-system juggernaut will take a couple of desperate measures to get its hardware into more hands.

The more surprising move is the announcement of a Nintendo 2DS. Priced at $130 and launching on October 12, the handheld system is $40 cheaper than the Nintendo 3DS, and it plays all the same games. But as the name implies, it doesn’t have a 3D screen, nor does it have the clamshell design found on other DS handhelds.

The design of the 2DS is definitely weird—the tapering thickness almost gives it the appearance of a doorstop—but the lack of a hinge should keep kids from snapping the hardware in half, and the lower price makes it a more attractive buy for parents.

Nintendo’s 3DS has fared better than the Wii U, but worldwide 3DS sales declined 25 percent year-over-year last quarter—not good for a system that’s only a couple years old. Nintendo has felt the squeeze from phones and tablets, as more money is now being spent on iOS and Android games than on dedicated gaming handhelds.

In a somewhat predictable move, Nintendo will drop the price of its “Deluxe” Wii U console from $350 to $300, effective September 20. The Deluxe package includes 32GB of storage, a copy of Nintendo Land, a console stand, a GamePad stand and a GamePad charging cradle.

It’s unclear what will become of the $300 “Basic” Wii U model, which only included 8GB of storage and none of the extras listed above. Nintendo may silently kill off this model, given that most retailers stopped selling it months ago. (Nintendo had previously insisted that the Basic model hadn’t been discontinued.)

Wii U

The Wii U price cut certainly looks like a response to upcoming consoles from Sony and Microsoft. Sony’s PlayStation 4will cost $400 when it arrives on November 15, and Microsoft’s Xbox One will cost $500 when it launches in November.

Although exact pre-order numbers aren’t known, Sony says that more than 1 million people havepre-ordered the PS4, and GameStop says pre-orders of both consoles have been “much stronger” than the previous generation. Nintendo, meanwhile, has sold 3.61 million Wii U systems worldwide since its November launch.

While Nintendo has long argued that its own software and hit franchises will help sell the hardware, it never hurts to have lower prices along with it. A cheaper Wii U and DS handheld could help give Nintendo a boost as it heads into a fiercely competitive holiday season.

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Updated at 2:48 p.m. PT with a video from IDG News Service.

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Microsoft to sell struggling Surface tablets to business customers outside the U.S.

Microsoft will start selling its struggling Surface devices to business customers abroad via channel partners on Thursday.

The move builds on a similar effort Microsoft launched in July to tap distributors and resellers to push Surface tablets to businesses in the U.S.

The channel program goes into effect in Canada and 16 European countries, including France, Germany, Italy, Sweden, and the U.K.

Until now, Microsoft only sold Surfaces in a limited way directly to business customers in these countries, as it had done in the U.S. prior to July.

Martyn WilliamsThe computer not enough people want.

The initial set of international distributors and resellers have been hand-picked by Microsoft using criteria like their geographic reach, experience selling tablets to businesses and the complementary services they’re able to offer customers.

“Like we did in the U.S. last month, we’re taking a measured approach at first, and plan to expand later,” said Cyril Belikoff, Microsoft’s Surface marketing director.

These channel partners will target private-sector companies, government customers and schools and universities. They will honor Microsoft warranties and provide services like asset tagging, custom imaging, on-site service, device recycling and data protection.

The other countries included in the channel program are Spain, Austria, Belgium, Denmark, Finland, Ireland, Luxembourg, Netherlands, Norway, Portugal and Switzerland.

Microsoft’s next goal is to extend the channel program to the other 10 countries where the Surface is available via its retail channel program.

The Surface, a Microsoft-branded tablet, hasn’t sold well since its launch 10 months ago. It was also controversial from the start because it competes against other Windows RT and Windows 8 tablets made by Microsoft’s hardware partners.

It comes in two main editions: the Surface Pro, which runs Windows 8 for x86 chips, and the Surface RT, which runs Windows RT, the Windows 8 version for devices that use ARM chips. Microsoft executives have said the company plans to make more products like the Surface, in which it’s in charge of both the OS and the hardware, in a nod to the success Apple has had with that model.

Martyn WilliamsMicrosoft hopes the $350 Surface RT or $800 Pro will be suitable for the suits.

In the first quarter, Microsoft shipped 900,000 Surface tablets, a 1.8 percent market share, according to IDC. Leading the pack was Apple with 19.5 million iPad shipments and a market share of almost 40 percent, followed by Samsung with 18 percent share, Asus (5.5 percent) and Amazon.com (3.7 percent).

IDC noted in that report that Windows 8 and Windows RT tablets from other hardware manufacturers had struggled to gain traction as well—1.8 million Windows RT and Windows 8 tablets shipped in the first quarter.

In the second calendar quarter, 1.8 million tablets shipped worldwide ran Windows 8, good for 4 percent share, while 200,000 Windows RT tablets shipped, a 0.5 percent share, according to IDC. That compares with market share of 63 percent and 33 percent respectively for Android and iOS. Surface shipments, however, plummeted to around 300,000, IDC told CiteWorld.

In its fourth fiscal quarter, ended June 30, Microsoft took a $900 million charge for Surface RT inventory adjustments, and later said in a regulatory filing that Surface sales in the quarter had generated $853 million in revenue.

Since the Surface launch, Microsoft has cut the price of the Surface Pro and the Surface RT and run promotions to try and spur sales.

Surface RT in particular has been a tough sell to businesses because Windows RT devices can’t run existing Windows 7 applications, only new applications built for the new OS and available in the Windows Store. Moreover, Windows RT ships with a version of Office, but it’s not licensed for commercial use.

In addition, Windows RT lacks many IT management features and doesn’t support the Outlook email client, but Microsoft is addressing those two issues in the 8.1 update of the OS, which is now in previews and slated for general availability in mid-October.

The Surface RT now starts at $349.

The Surface Pro is more powerful and can run legacy Windows applications, but it starts at $799 and reviewers have faulted its limited battery life. It started shipping in February.

Juan Carlos Perez covers e-commerce, Google, web-application development, and cloud applications for the IDG News Service.
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