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Let me get this out of the way first: Wow. 3D gaming without glasses is (likely) first to market on a handheld? Don't forget about Nintendo's aversion to HD gaming, because it apparently doesn't affect gameplay. Since Nintendo is willing to found a new platform on 3D, the company must be confident it will significantly affect gameplay. So how will 3D change things? I have a few ideas. Remember the rumors that the next DS would have some sort of motion tracking? Good, remember the mini-game in Mario 64 that allowed you to manipulate Mario's facial features with the analog stick? On the 3DS this could be remade. A user would see a 3D representation of Mario's face, that user could be manipulated through gestures. Essentially, if the rumors are true, users could have "touch" control over 3D projections. Excited yet? I am.
Glasses-free 3D is important for a handheld, not only for usability but also for word of mouth advertising. After launch everyone that sees this device on a train or in the mall is going to gawk. 3D is ubiquitous right now. It is attention-grabbing on a level HDTV's haven't been able to attain. Now Nintendo is on board, hoping to bring new ideas to gaming through the use of the technology.
If Nintendo is able to pull off truly compelling software through this technology it may reignite core gamer interest in handhelds. It's been a slow trend over the last five years. As fewer and fewer core games came out for the DS and lifestyle software became prevalent, the core audience drifted from the DS. I don't think they moved to the PSP, because that platform has many problems of its own. The way I see it, is that there has been a genuine decline in interest in core handheld gaming.
What's to blame for this? Two things, first is the rise of lifestyle software on the DS that turns off core gamers. Second, and much more important is the rise of the smart phone. The iPhone's myriad cheap, simple, time sucking games have eaten into market share for both the DS and the PSP. Now platforms like the iPhone and Palm's webOS (Android is here too, but far behind on this count) are bringing legitimate games with 3D (graphics) to bear.
This has to be a concern for Nintendo. While the DS can function as a lifestyle device and a gaming device it can't compete with smart phones when it comes to features. The DS can't make phone calls, there is no email functionality, text messages are a no go, efficient social networking is out of the question etc. However smart phones (like the iPhone or the Palm Pre) can compete with the DS as both a lifestyle device and a gaming platform.
The 3DS is obviously a move to differentiate Nintendo's platform as a true gaming device. As opposed to the iPhone which is restricted to just touch input. The longer Nintendo can innovate in mobile gaming hardware the longer the market for dedicated gaming devices will survive. I believe that the day will come that there will not be a market for dedicated mobile gaming devices. Competition from fully featured phones like Apple's and Palm's will cut too deeply into Nintendo's market share and Nintendo will be forced to respond in a different way. Either as a third party publisher of mobile games, or jump into the smart phone game as a hardware manufacturer. I see one of these outcomes as inevitable.
What the 3DS truly is, though, is an innovation forced by competition from companies that five years ago operated in completely different oceans. Do not think of Nintendo as a backwards company. Look at the DSi: internal flash memory, Wi-Fi radio, and a downloadable game (app?) market. Is Nintendo truly lacking in mobile device know-how compared to Apple, Sony, or Palm? The answer is no. Nintendo is a ferocious innovator in mobile technology and will do whatever it takes to keep its mobile software and hardware business as lucrative as it has been for more than twenty years. Glasses-free 3D is their innovation for now, and a SIM card may be their next one.
