Wired:

Nintendo was caught unawares by surprisingly slow sales of the 3DS, the company said Tuesday.

“Nintendo 3DS has not been selling as expected since the second week [of availability in the United States and Europe], and this is not just in the Japanese market but also in the United States and Europe,” Nintendo President Satoru Iwata said during an investor briefing in Tokyo. “Therefore, we recognize that we are in a situation where we need to step up our efforts to further promote the spread of Nintendo 3DS.”

I used to swear by Nintendo handhelds. In the particularly bleak period of gaming from the late 1990s and into the early 2000s (when the Dreamcast died, taking fun with it), everything had to be 3D with as many polygons as you could fit in. Too many games had to conform to pre-defined genres, and as budgets escalated, risk and innovation all but disappeared.

Nintendo’s handhelds were the last place where the kind of excitement and drive of early 1980s arcade and home gaming thrived. Lower budgets meant you got crazy little games like WarioWare that just weren’t—at the time—feasible on TV consoles. But Nintendo’s handhelds—like all its consoles—always suffered from the same problems:

• A launch line-up weaker than everyone was expecting;
• A surprisingly short period of A-list games—releases soon turn into churn garbage for children;
• Expensive cart-based systems, which make each purchase a risk.

It took a while, but iOS eventually obliterated these issues. Since the platform regularly evolves, there’s no launch line-up, but there is a constant stream of titles. Most of them are utter crap (much like on any other system, ever), but I find something new I’d be interested in playing every single day. And because the system uses digital distribution, prices are lower and risk for the consumer is reduced. This also knocks budgets, forcing developers to innovate and rely more on gameplay than gloss.

These are the things that got me hooked on iOS gaming, to the point that I’m now the guy who deals with Tap! magazine’s games section, but anecdotal evidence beyond my own experiences made me wonder if a wider pattern was emerging regarding a transition away from Nintendo and towards Apple in the handheld space. I first became aware of a shift on interviewing an ex-Atari developer a couple of years ago. He told me his home was full of gaming kit—his children had access to every console available; but since iOS arrived, his daughters and their friends pretty much only ever played with Apple kit. “The DS,” he told me, “is dead”. The reason was that an iPod touch provided access to similar quickfire games to those they’d played on Nintendo consoles, a few titles with depth, but also offered internet access, enabling kids to mess around on Facebook.

As time moved on, more people told me that their kids were becoming fascinated by iOS, playing games on iPhones, iPads and iPod touch devices, all but ignoring handheld Nintendo kit from that point on. With youngsters, the intuitive nature of a touchscreen beat the relatively complex buttons of a traditional handheld; for older kids, the range of cheap games made some of their parents keen to embrace iOS, rather than paying 30 quid for a piece of plastic that could get discarded within minutes; and for teens, the importance of access to content other than games was increasingly of paramount importance. And with an entry-level iPod touch being anything up to 30 quid cheaper than the 3DS and having games that cost a fraction of the price, I wondered how Nintendo would fare this time round.

Perhaps things will change for the 3DS in the same way that they did for iOS. According to Wired, Iwata argues that it’s a

challenge to get users to understand the appeal of the [3D] screen even when they get their hands on a unit.

This was certainly the case with iOS. Many gamers I know considered iOS devices useless for gaming, right up until they experienced them. (Hell, back in 2008, I wrote—with an amusing lack of prescience—Why iPod touch will never be a major gaming platform for Cult of Mac, an article I subsequently countered when I had a year’s experience of the platform.)

That said, some people I know with a 3DS rarely use the 3D component, because they find it painful. And it’s also interesting to note that the majority of 3DS owners I know are also so-called ‘hardcore’ gamers. During the last-generation handheld scrap, Nintendo’s presence went across the board, from pensioners to children, from gaming newbies to dedicated fanatics. Sony fans would yell from the sidelines about Nintendo kit not being for ‘proper’ games, but Nintendo fans would smugly note that they actually had a range of titles and the best of everything. Right now, Sony’s almost irrelevant in the handheld space, and Nintendo appears to have taken its slot. Whenever I question Apple’s surprising rise in gaming and suggest it’s at the expense of Nintendo, the response is identical to the one Sony fans argued years ago. Nintendo, they say, is now the preserve of ‘proper’ games, unlike those ‘throwaway’ and ‘casual’ titles on iOS—the ones Nintendo in part used to thrive on, and that attracted the audience outside of core gamers that gave Nintendo so many DS and GBA sales.

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.

The tech world went mental last week when it turned out your iPhone is a digital stalker, recording your every move, and that the file that held the location database could be accessed by a third-party desktop application. People got terribly angry about the whole thing, tweeting about it (with geo-located tweets), while checking into Foursquare, and then additionally yelling about Apple on Facebook (next to the bit where they’d left their personal details online for everyone to see).

And, yes, I’m being flippant (again), and, yes, this iOS problem is clearly some kind of stupid bug where cache isn’t being flushed, and, yes, Apple should perhaps make the ability to turn off such data collecting more discoverable (tip: if you’re the kind of person to wear a tin-foil hat, turn off Location Services in the Settings app). But Marco Arment makes a few really good points about this Apple privacy snafu in his piece Privacy and incentives.

His main argument is that Apple largely doesn’t give a crap about your data, because it doesn’t make (much) money out of it, and that Apple’s always been good at protecting privacy. You might PFFT loudly at that, but bear in mind what’s happening in digital publishing on the iOS platform: publishers are mostly pissed off at Apple not providing access to user details, not the 30 per cent cut Apple takes.

Arment continues, arguing hugely popular websites are far worse than Apple when it comes to privacy. He cites Google and Facebook, but adds that many other web services

make money overwhelmingly from advertising. Advertising can be far more lucrative when it’s targeted well, so there’s a huge incentive for these services to collect as much data about you as possible, store it forever, and indirectly sell it to advertisers by selling targeted services and “eyeballs” to them.

People forget that the customers of Google and Facebook aren’t the users as much as the advertisers; but Apple’s customers are the people who buy the kit. Apple sees content providers as facilitators, adding value to the things Apple itself then sells to its customers. This is a big difference, and a big part of the reason why I don’t think Apple’s suddenly decided to become Big Brother; like Arment, I think the location database issue is a bug, and it’s one that will be squashed in an upcoming iOS release.

Nice quote from James Cameron on TMZ, referring to us managing to escape destruction by Skynet and machines then taking over:

With everybody going through their lives bent over their Blackberries all day long, you could even argue the machines have already won.

A wave of paranoia has been unleashed by discoveries that your iPhone is tracking your every move (Guardian), prompting some to assume Apple is sending the data to the mothership, in order to have you beaten to death if you don’t look at enough iAds every month. MAN, THOSE APPLE GUYS ARE EVIL.

But wait!

Alex Levinson reports some shocking discoveries:

• Apple is not collecting the data;
• The location data is used by software such as Maps and Camera, in order to operate;
• The hidden file is neither new nor secret (it’s just moved);
• The ‘discovery’ was in fact published in 2010.

But hang on… If this is all the case, then this is the media whipping up a bullshit frenzy about Apple, just because that’s more newsworthy than:

Location data still on Apple device, so location-oriented apps still work. Bloke writes app to pull data to desktop. World doesn’t explode. No-one really cares. Well, apart from editors who know they can fire up the link-bait machine. Oh, and people going ARGH, THEY KNOW WHERE I’VE BEEN while tweeting their geo-location data, checking into Foursquare and Gowalla and posting to Facebook that they’re “away from home, in a pub on the Thames, if you want to join me,” which of course has NO SECURITY IMPLICATIONS WHATSOEVER.

Oh.

Poor Apple. It must be really hard for the company right now. As reported by yours truly (in a suitably bleary late-night manner), iPad sales ‘disappointed’ during Q2 and were ‘below expectations’—assuming you’re an analyst and don’t really have a clue, but like to play games with Apple stock by flinging your guesses at the internet, like a monkey throwing poo at a zoo.

But what about the iPhone? Henry Blodget already told us on Business Insider that Apple’s device was dead in the water. According to Apple’s Q2 report, here’s what ‘dead in the water’ looks like:

The Company sold 18.65 million iPhones in the quarter, representing 113 percent unit growth over the year-ago quarter.

“Fuck,” said Steve Jobs, surprisingly candidly. “Apple really is totally doomed. Despite second quarter revenue of $24.67 billion and record second quarter net profit of $5.99 billion, and us selling every iPad we can make, those analyst guys are always right, so we must be heading for a pretty big fall in Q3.” Jobs also added that the iPhone, having sold 18.65 million units in the previous quarter, was to be immediately cancelled “because that Blodget guy seems like he knows his stuff, and so I guess he knows something we don’t”.

Oh dear—my apologies. I appear to have accidentally tapped into a collective-consciousness wet-dream of Blodget’s and every analyst who reports on Apple. I HATE IT WHEN THAT HAPPENS.