I can but agree. We're seeing NDS cannibalize 3DS here in same way.
GBA launched at $100. GBASP was the same price (I think). DS was the first Nintendo handheld to launch above $100 at a whopping $150, and it sold terribly after that first Christmas. Nintendogs + $130 price drop in August 2005 slowed the hemorrhaging and made for an interesting "race" between it and PSP each month. When DSLite launched, it was a price increase in Japan (Japan has historically been much less price-sensitive than any other market), but Nintendo decided to
not raise the price in the U.S. Therefore DSLite launched at the same $130 as DS was selling at and was a rocketship to the moon. At that point, the DS was an established system with games people wanted (e.g. Nintendogs, Brain Age, NSMB, Mario Kart, Animal Crossing), so a new hardware launch at the old hardware price had a dramatic effect felt for years.
I think the DSi launch in April 2009 (~3 years after DSLite) was sort of the market
expecting DSi to be the successor the DS instead of just another revision. It's timing was right (~5 years after DS launched when DS launched ~4.5 years after GBA launch) for a successor, and 1 million in a month outside of Nov/Dec was basically unheard of. The price was higher ($170, I think), but the DSLite didn't stop selling, either. Therefore monthly totals were still quite high for the old+new. I think this kind of confused the market that maybe thought DSi was the successor to DS/DSL. From Nintendo's standpoint, it made sense, as it was their real attempt to
stop piracy, which was horrible worldwide on the original DS. But it might've confused the market some, possibly.
3DS two years later at a +50% price increase over DSi was just way too much. 1) Market confusion from multiple angles (e.g. didn't the new DS just launch - DSi, isn't this just another DS but with 3-D). 2) No real gaming reason to upgrade ("potential" doesn't make it much out of the hardcore to sell a system). 3) Economy made the price prohibitive, in any case, so just one more reason not to upgrade thrown on the pile. During this time, DS continued to decline (e.g. 2.5m in Dec-2010 to < 700K in Dec-2011). Then the price drop to $99 in late May, and DS about equaled 3DS in June/July (not that 3DS was doing good, but as you said, it was eating into potential buyers of the 3DS; Personally, I don't consider that a bad thing at all, since the handhelds need to last a long time, and as long as Nintendo can keep the handheld environment active, even if it's not on the 3DS alone, that's better than a smaller overall handheld environment without the contribution from DS). This Nov/Dec, wouldn't be surprised to see a big increase YOY for DS, as long as the stock holds. 3DS would do well to match last year's totals, in comparison. That would still have 3DS selling a lot more than DS, but it should just re-emphasize that the handheld market needs to be a cheap market. It doesn't work well with keeping raising the prices. $40 standard games for 3DS gets brought up a lot as a big issue with software sales on the system. It's just too much for the mainstream buyer to "risk" on a handheld game, especially with the free/$.99 options available on other platforms. Returning to the DS model pricing (top $35 with most $30 or below) would be great for units, but it may not work for revenue to support much development on the system...
