Nintendo releasing new handheld device, cheaper Wii U

A Nintendo Wii U touch-screen controller displaying the "Super Mario Bros." game
Akio Kon | Bloomberg | Getty Images
A Nintendo Wii U touch-screen controller displaying the "Super Mario Bros." game

In a bid to reverse weak sales and woo gamers back to its offerings, Japanese game maker Nintendo will launch an inexpensive handheld gaming device and offer a $50 price cut for its 32GB Wii U console in North America and Europe this holiday season.

Dubbed the 2DS and priced at $129.99, the new addition to Nintendo's 3DS range will go on sale Oct. 12. It will play 3DS and DS games with 2-D graphics, as its name suggests.

Known for games featuring much-loved characters like Mario and Zelda, Nintendo has faced stiff competition from less costly or even free mobile games on tablets and smartphones. This reflects an industry-wide trend of mobile games' taking market share from consoles and handheld devices.

With the 2DS, Nintendo hopes to attract customers who have not been able to afford its 3DS systems, priced at $169.99 and $199.99, Reggie Fils-Aime, president of Nintendo of America said in an interview.

Some industry analysts have criticized Nintendo for not taking advantage of the rapid growth of games on iOS and Android mobile devices by keeping its game franchises limited to its own systems. Nintendo executives have said letting its other popular game characters, such as Mario, roam on mobile devices would impair the company's hardware business in the long term.

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With the 2DS, Nintendo is going after "not just consumers who have necessarily a phone or tablet" and want a taste of the company's game fare, "but all consumers, especially younger consumers," File-Aime said.

The 2DS release will coincide with the launch of Nintendo's kids role-playing game "Pokemon X and Y."

Nintendo's prospects have dimmed since it introduced the Wii U console last November. After posting tepid sales—3.6 million Wii U units sold through June 30, compared with 9.3 million units of its successor, the Wii—the company aims to sell 9 million consoles by next March by offering new games and reducing prices.

To boost Wii U sales, Nintendo will cut the price of the 32GB deluxe version to $299.99, from $349.99 starting Sept. 20, Fils-Aime said.

The eight month-old Wii U will get fierce competition from Sony's PlayStation 4, priced at $399, and Microsoft's Xbox One, at $499, which will hit store shelves in November. Both next-generation systems will come with cloud gaming technology, which lets players stream from remote servers.

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The company has also timed the release of games such as "The Legend of Zelda: The Wind Waker HD" and "Super Mario 3-D World" to reinforce its Wii U console, Fils-Aime said. Third-party titles include "Call Of Duty: Ghosts," by Activision Blizzard, and "Assassin's Creed IV: Black Flag," by Ubisoft, which will be released this holiday season.

These launches "are going to drive the [Wii U] business forward, and we're certainly going to do a lot of marketing activity behind the price decline," Fils-Aime said.

Analysts say the three-decade-old Nintendo has an uphill climb as rivals including up-and-coming GungHo Online Entertainment post millions in sales per day with just one mobile title, "Puzzles & Dragons."

"One of our benefits is that our products tend to sell well over time versus this spike up and go-away type of sales curve that other companies may have," Fils-Aime said.

—By Reuters