Engadget reports on Nintendo’s rather poor quarter:

The company posted profits of ¥40.9 billion (about $631.6 million) for the October – December period, representing a 61 percent quarterly drop. That’s especially disappointing, considering that this period has traditionally been strong for Nintendo, which had previously forecast an operating profit of ¥1 billion (around $12.9 million). Those forecasts have since changed, however, with the manufacturer now predicting a ¥45 billion ($580 million) operating loss for the full year, ending March 31st. Nintendo blames the poor showing to sagging 3DS sales, which have forced it to slash prices.

Despite my gaming now almost entirely being on iOS, and my belief that iOS has heavily impacted on Nintendo (through people gaming on smartphones and iPods, and through parents buying children iOS devices over Nintendo handhelds with expensive, easy-to-lose cartridges), I was fairly positive about the company a year ago:

It remains to be seen if the 3DS sales slump is a temporary glitch, and even if the console isn’t a massive hit, that certainly doesn’t mean Nintendo is in any way doomed. Like Apple, it’s managed to be profitable at almost every point during its history, even when one of its consoles only had a minority share of the market. But Nintendo could for the first time find itself ousted as the default company synonymous with handheld gaming—and that would be a pretty major shake-up for the entire industry.

I still think Nintendo is probably the company most people think of as synonymous with handheld gaming; the thing is, that’s clearly no longer enough for it to remain profitable. And since that was Nintendo’s trump card—an Apple-like profitability regardless of its market position, that is a major concern for the company.

When the 3DS appeared, I didn’t think it was enough. It felt like a relic, with a gimmick—an echo of a bygone age, where dedicated handheld gaming devices still mattered. It continued Nintendo’s line of thinking that had worked so well since the original Game Boy: technologically middling but accessible and portable hardware; reliance on high-quality first-party IP that’s drip-fed over many months to an eager audience; software sold on expensive cartridges; an honest focus on the purity of gaming; a level of accessibility that the likes of Sony can only dream of.

These ideals were once precisely what the industry needed, but now Nintendo has to face the harsh reality that it’s veering dangerously close to becoming another Sega. If it cannot halt the decline with the Wii U, whatever it brings out next in the handheld space (and I’ll be surprised if the DS brand isn’t retired, enabling the Game Boy to—potentially—triumphantly return) will have to be nothing short of amazing—a device that will wrench people away from smartphones and iPods, back to Nintendo. But if Nintendo continues to stubbornly follow the same path, will that be enough? It wasn’t for the 3DS. So will the company bite the bullet and go with the flow, with a system that works with cheaper downloads rather than expensive cartridges, and that at the very least recognises some manner of an app ecosystem (with stronger options regarding web browsing, social networking, reading, movies, music, and so on)?

I hope so. Despite what raging Nintendo fan-boys think whenever I criticise the company (my record to date: a drop of 50 Twitter followers from one short string of comments some months back), I do not want Nintendo to fail. Although over-reliant on refreshing certain aspects of its catalogue a little too often, it’s also been a company of innovation. The original DS was a brave move, as was the Wii. Both made gaming more accessible and open, wrenching it from the claw-like grips of so-called ‘hardcore’ gamers. For a long time, I considered Nintendo the Apple of gaming—a company that cared about the details and about the right things (fun, excitement, enjoyment). Nintendo’s problem these days is that Apple is now the Apple of gaming—and the Japanese veteran needs to fight back, perhaps borrowing some of the tricks used by the plucky American upstart.