Nintendo released a slew of information pre-TGS about their plans for the 3DS. Namely, it involves bringing any franchise that has ever been popular to the platform. Monster Hunter. Fire Emblem. Mario Tennis. Kid Icarus. The list goes on and on, and frankly, as a Nintendo fan it's hard not to get a little excited. HERE is where the system that originally promised so much is going to get good.
And then… Nintendo stocks dropped 5%.
It seems hard to fathom (seriously, Monster Hunter 4 is such a guaranteed gold mine that Nintendo will have a built-in Japanese audience for years), but the investors have lost their confidence in Nintendo, a company that only two or three years ago was pumping out multi-million player hits with things like Wii Sports Resort and New Super Mario Bros. Wii. Investors believe that even these sorts of household names on such prominent display aren't enough – that massive influx of new players that the Wii and the DS brought in have, in their view, "set sail" for smartphone gaming.
While that's perhaps a bit of a stretch (and the idea that Nintendo would ever develop for, say, iOS is ludicrous), maybe it's not so much of a stretch. The idea here is that maybe the Wii and the DS represented the last gasp of casual players buying dedicated gaming machines. If that's the case (and it is perhaps the case, though the 3DS is too early in its life cycle to tell really, and is performing about at par with the original DS at this point in its lifespan), then video games indeed have a lot to fear.
This idea that investors have brought up seems to suggest that dedicated video game consoles are only for hardcore players, and smartphones have that broad appeal now. That's a problem, as dedicated consoles are, you know, actually equipped to handle more involved experiences in a pleasingly tactile way. If the idea of a game like Super Mario 3D Land is "too intense" even for casual gamers, that's problematic for Nintendo – it suggests that the things they banked on (name recognition, a unique gimmick) aren't going to be enough this time around.
The death knell has been sounded for the 3DS (and to a lesser extent, the Vita, though most of that optimism is the rosy-coloured view that tech and gaming specialists look at this new, shiny piece of hardware) perhaps too soon, but one can't deny that mistakes haven't been made on both sides of the Big 2's operations. Nintendo has dropped the ball on: price, online offerings, third-party support early in its lifecycle, compelling software right out of the gate, and to some degree, design (even though I don't think a second analog nub is necessary, apparently Capcom does). The Vita has similar issues. The launch line-up looks exactly as barren as the 3DS's was, the price appears to be fairly exorbitant ($380 for the non-Wi-Fi model, according to reports out of TGS), and the divide between "hardcore" and "casual" gamers is going to be ten times as wide as on the 3DS.
It demonstrates two companies, to some degree, foundering in the face of massive changes. Much like in Hollywood, the response to an attack on profits (illegal downloading in the case of movies, smartphone gaming in the case of games) is to clamp down on originality and bank on familiarity. The amount of reboots, remakes and ports on the 3DS and Vita is staggering. The number of new IPs, while definitely increased on the 3DS in the last little bit, is pretty low, and especially considering that the DS made its name on somewhat lo-fi, quirky offerings, it's pretty disappointing to see a pretty drastic turn away from that. Sure, we're still getting stuff like the strangely named Bravely Default: Flying Fairy, or Rhythm Thief, but the response from Nintendo and Sony has been "this is familiar, you know this, you're definitely going to buy this." It's a hedging of bets, and while Nintendo is pretty good about changing up stuff like Mario or Zelda enough to make it fresh, I doubt that the cavalcade of PS3 knock-off games like Uncharted are really going to do anything that is specific to the portable gaming form and therefore interesting to anyone who wasn't already convinced.
Stuff like the second analog stick, the increase in price of the Vita, the dropping of the 3DS's price – it shows that these companies have no confidence in their abilities to bring in people based on sheer creativity and thoughtfulness of game design alone. Though it's maybe confined to the handheld space (it's not, by the way), that sounds like pretty worrying stuff for the future of video gaming as both a respected form of entertainment as well as as an artform.