• by Aaron Baar , June 28, 2011

Launched with great fanfare and expectation in March, Nintendo's 3DS has not yet set the gaming world on fire -- partly because the content, price and interest aren't hitting a sweet spot among casual gamers (who would create a breakaway hit).

According to a new report from entertainment, media and technology market research firm Interpret, interest in Nintendo's game system has declined 27% since the company did a similar survey a year ago.

"The first [survey] was done right after Nintendo announced the 3DS, but before they actually showed anything. That was based on the anticipation of the consumers," Michael Cai, vice president of technology and gaming, tells Marketing Daily. "What you see was the purchase intention is underperforming, especially now that the device has been out for a few months."

The interest decline can be attributable in part to Nintendo's decision to give third-party developers more access to create games at launch, he says. While that strategy made many games available on the system, some of Nintendo's well-known franchises (such as Super Mario Brothers and Zelda) are not yet available, and consumers are opting to wait until they come out, he says.

"If they focused a lot on their first party titles out of the gate, consumers would be happy," Cai says. "[But] they tried to let third parties develop the games, and consumers aren't thrilled. They are holding off purchases until they see those [franchise] games."

Furthermore, excitement over the system has not spilled over toward the casual gamers who have made Nintendo's Wii and DSi so successful, he says. Many of the early 3DS purchasers have fallen into the hardcore gamer demographic of males between 13 and 34 years of age.

"It's more of the console gamer profile, rather than what Nintendo was successful with the Wii and DSi in addressing the mass-market gamer segment," Cai says. "When that happens, that's when you see the [sales] curve healthy for the first couple weeks. That's typical of a device that's more appealing for the core audience than the mass market."

Finally, the game's $250 price tag (about $100 more than a DSi and $150 more than a DS Lite) is also a barrier for casual consumers, he says. "When you think about the reality of the market, you have the DSi still on the market, which comes at much lower price point with a lot of content," he says. "Those mass-market gamers, when they're seeking a new device for themselves or their kids, they're going to evaluate [the price] and they're trying to decide whether it's worth it."

Regardless of the 3DS's struggles (and a drop off in box office interest in theatrical programming), Cai says the 3D market still holds potential for the consumer electronics industry. Like the 3DS, consumers are still wary about the amount (or lack thereof) of quality content for 3D theatrical and home television programming, but as the industry experiments with what works and aligns it with consumer expectations, it should continue to grow.

"I have a lot of faith in 3D. There have been early challenges, but I think it's here to stay," he says. "All of the companies have spent too much money for it to fail."