The price cut wasn't unprecedented, not even for a Nintendo machine--N64, Xbox and PS3 all saw major price cuts within the first year of their life spans, and the recovery for those systems was no where near as impressive. (EDIT: The near-term recovery, I mean. PS3 has gone from strength to strength since its difficult launch, but it needed further price cuts, a lot of software and the slim model to get it there)
All this focus on the price ignores the other problems Nintendo faced earlier in the year, which they may have overcome or may be in the process of over-coming. Brand confusion with the original DS systems, health-scare stories across the media, the argument that smartphones and tablets meant traditional portable game systems couldn't succeed, the poorly thought-out, low profile software release list, the highlight of which was an N64 remake, and of course, the lack of features (no eShop, not even a web browser on day one) and the poor marketing campaign (the 3D centric one).
The price point was one of many problems that badly hindered the 3DS during its early days. Its first party launch titles were the weakest of any Nintendo system--three versions of Nintendogs + Cats and Pilotwings. Third parties didn't step up to provide compelling, exclusive content. And as far as I'm concerned, in general, software was over-priced from the start. In the face of all those problems, the 3DS has had an excellent recovery and has done brilliantly to (possibly) reach this milestone. Going forward, Nintendo need to ensure a steady stream of good, quality content hits both retail and the eShop, and they need to reconsider their software price points. Yes, people are jumping at the chance to buy Mario Land, Mario Kart and Zelda, but if Nintendo wants long-term success they need a software market that includes successful third party games. Staggered software pricing would definitely help out there, and a commitment to cheaper eShop games would allow the eShop to become a more successful and competitive part of their overall strategy. Nintendo can't afford to continue to miss out on the benefits of a successful online system, and whereas they've taken good steps in the right direction, eShop can't afford to be seen as an over-priced, smaller-scale app store. I'm not saying they should match app store prices, but charging £4 for a 69p app store game is ridiculous--prices of £1-£5 across Virtual Console and new eShop content would be a big step in the right direction.
As excellent as the recovery has been, the long-term challenges facing the 3DS are still quite severe. If Nintendo aim to match or exceed the success of the DS, they need to continue to work hard and evolve the 3DS. It's going to be an interesting 2012, and I hope both Nintendo and Sony are up to the challenge of making their portables succeed in the long-term.
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