Don't Assume Nintendo Will Drop its 3DS/Handheld Line: Here's Why

[VideoGameAccountant]

I think everyone has made the point but I want to add some things that haven't been mentioned yet (or they have and I can't read)

 

• Nintendo's markets were split - One interesting thing about the DS and 3DS was that the US was the biggest market (in terms of total sales) for the DS but Japan was the biggest market with the 3DS. At the same time, despite the Wii being a huge hit in the US, in Japan, it sold less than the NES and SNES. Basically, any console Nintendo made was going to appeal to the West and any handheld was going to appeal to Japan. And each system needed 3D Mario, 2D Mario, Mario Kart and now Smash Bros. Nintendo makes about 7-8 games a year. In a 5-6 console life, Nintendo was making a lot of repeats. Also, as Rol alluded to, it's not effective anymore to focus on two systems. Development times are getting longer and longer.  You can't develop for two systems anymore
• Droughts - This goes along with the first point, but Nintendo saw that a major reason the Wii U failed was because of hardware droughts. The Wii U's first two quarters were actually pretty good. The system was selling well in the beginning (and it had a ton of third party games). The system fell off in 2013 as nothing released for it (there were other issues too but this is the one Nintendo is honing in on). Nintendo is able to have a constant flow of software because they were only making games for one
• The "third pillar." - I think you misunderstood why Nintendo had the third pillar and it has nothing to do with backwards compatibility. With the "third pillar" Nintendo was giving themselves an out. If the DS succeeded, the Gameboy brand would fade out. If not, Nintendo would say "lol, just kidding. Here's a new Gameboy." The same is true here. Nintendo wasn't sure if this new strategy would work so they are keeping the 3DS alive. If the Switch failed "lol here is a new 3DS." The New 2DS XL is not unlike the Gameboy Micro. Also, unlike the Wii U, it's still selling. Kimishima has said they aren't sticking to the structured console lifecycle, so Nintendo will "support" the 3DS until it stops selling. The "third pillar" was just a Plan B as the 3DS is now.
• 3DS Games - One thing you mention is that Nintendo is still making 3DS games; however, all of the games they are releasing are made by other developers. Pikmin is from the new Artoon (not sure their name). Ever Oasis is from Grezzo. Pokemon Company does their own thing (they are actually a separate company), and Metroid: Samus Returns is being made by MercurySteam. The only game Nintendo's internal companies have made for the 3DS is Fire Emblem Echoes.  
• Shareholder's Argument - You made this weird argument about shareholders which tells me you don't do much with stocks. Investors care about returns. If Nintendo can do that with one system vs two, then what do they care.  The  Board and Management have a fiduciary duty to the shareholders to maximize the value and longevity of the company. If the two system approach is not going to do that, then they are expected to change course. The shareholders might be more upset if Nintendo tried to have two systems and shareholder knew the strategy wasn't feasible. They won't get shocked because of a "lowering of the ceiling." It's a dumb point because earnings will likely be up, and Nintendo's share price is increasing
• The Nintendo Switch is a handheld - The reason your arguments sucked is because the Nintendo Switch is a handheld. You argument relies on this idea that Switch is not a handheld despite being able to play it anywhere (which is the whole point of a handheld isn't it).