As of the end of January 2014, after about three years on the market, the 3DS has sold about 42.8 million units of hardware worldwide. not a bad number, right? Well, here's the number that it sold by the end of 2007, a similar period of time.

64.1 million.

Now, this isn't as big as, say, the PSP compared to the Vita, or the Wii compared to the Wii U. Nevertheless, this represents a roughly 1/3 decrease in sales over a similar period of time for the DS to the 3DS.

Today's mission: to figure out who to point fingers at!

First, let's compare the DS and 3DS's first 35 months on the market in the United States. Surely the world's biggest market must account for a huge portion of the decline! Actually, the USA has been a decent supporter of the 3DS. Roughly 13.4 million DS's were sold the first 35 months in America, compared to about 11.9 million 3DS's. That's a difference of under 10%, or roughly 42,000 DS hardware sales a month for those 35 months. Thus, we can say the 3DS is doing fine in the USA.

How about Japan, the handheld capitol of the world? Admittedly, the 3DS is doing somewhat worse than the DS did during its first 36 months: the DS sold over 20 million, compared to over 15 million for the 3DS. However, this is still only a 25% decline... quite a bit less than the worldwide 33% decline.

How about Europe? In the DS's first 35 months of sales, it sold nearly 21 million units in this region. The 3DS sold... a bit over 12 million.

That's right. In Europe, the 3DS is a roughly 42% decline from its predecessor!

Why is the 3DS doing so badly in Europe in particular? Well, for that answer, let's look at the big European DS games of 2005 to 2007.

• Nintendogs
• Brain Age
• New Super Mario Bros
• Mario Kart DS
• Brain Age 2
• Pokemon Diamond/Pearl
• Animal Crossing: Wild World
• Super Mario 64 DS

And all the sudden, our problems become clear.

Out of the eight above games, two (the Brain Age duo) never had a worthy sucessor. Another two (NSMB and Nintendogs) had notable sucessors, but these were notably less sucessful. Teh only real improvement from the DS to the 3DS was the 3D Super Mario game, in which case 3D Land is near certain to outsell 64 DS by a fair margin. Meanwhile, games like Pokemon X/Y and Animal Crossing: New Leaf came out later in the 3DS lifecycle than their predecessors did in the DS lifecycle.

So, what can Nintendo do now? Well... not much. Brain Age is dead, and they can't reverse time. But maybe they don't need to do very much. The DS peaked in 2007 and 2008 in Europe, roughly equivalent to 2013 and 2014 for the 3DS. If Nintendo can keep the 3DS relevant into, say, 2017, it will have proportionatelly better legs than the DS did (DS sales were roughly cut by two thirds from 2008 to 2011). The 3DS might never reach the DS's level of success thanks to a lack of Brain Age styled hits and less early killer apps, but if it even has a similar mid to late life as the DS, it can make up a fair proportion of lost ground.

It's underperforming everywhere but Japan. Handheld gaming is dying and nothing short of erasing smartphones and tablets from existence is going to reverse that trend.

There's actually nothing that indicated that handheld is outright "dying"; it's shrinking alright, but dying? I think that's too early to tell actually. Most people agree that this home console gen will see a decline in HW sold compared to last gen; does that mean the home consoles are about to die as a market share? No, probably not.

As long as phones and tablets have the control methods they currently have (ergo, touch screens without haptic feedback) I think there will always be a niche market for handhelds - even if there's only room for one console.

Last gen we had roughly 230m sales between the PSP and DS. With this gen 3DS is on track to sell 80m and Vita 20m, that would put the entire handheld gaming market at 100m. That's a 57% decrease, absolutely massive. 

Yes, that's a huge drop, but it's not the same thing as the handheld market out right dying. Let's say that that all the home consoles sell 200m units this gen, that's a 20% drop. That would be pretty big as well, but I would be hard pressed to call that a dying market either. With the introduction of mobile gaming, a lot of the casuals have moved there, which will probably show up in sales for all dedicated gaming machines, but it's way to early to say it's a dying market. But a huge drop, nonetheless

It's not going to die...
I think nintendo will have a handheld market. But smaller, and they need to embrace that

But it's cellphones and tablets eating into their market... Particularly imo, the less expensive games to develop that cell like hotcakes (brain Age).

There are games that are not possible control scheme wise on cell phones. People will still want those.
People will still want a dedicated gaming toy for their kids and not give them a cell phone. Some people like me will just want one to play pokemon :P.

Actually... come to think about it, why don't Nintendo release Brain Age as a mobile game? It's not selling well on 3DS, and thus it wouldn't eat into Nintendo's handheld market. Nintendogs could work as well. Both games would work great with touch controls! I don't think Nintendo should release every game on mobiles, but these games could really work without damaging them.

Let's look at the present, not just the cumulative results of the past.

The 3DS is down by a dangerous amount yoy.

In Jan 2013 it averaged 220k per week. In 2014 it averaged 139k per week.

In Feb 2013 it averaged 186k per week. So far in Feb 2014 it's averaged 132k per week, and that number should only drop with next weeks data.

Let's break it down per region.
US
Jan 33k, 34k
Feb 41k, 40k

Europe
Jan 44k, 46k
Feb 34k, 40k

Japan
Jan 128k, 47k
Feb 97k, 40k

The west is steady yoy, but Japan is crazy low. Even comparing the full year of 2013 to 2012 shows this. In the west the 3DS sold about a million more in 2013 than 2012, but in Japan it dropped by about half a million. The system had great sales in Japan, but at the moment it seems to be the most troubled region.

I don't see the Japan thing as so worrying, the 3DS is close to reaching the Game Boy advance in sales in Japan, most of the people who would buy a handheld already have one, you can't expect them to buy a console twice.
The 3DS should pass Super Nintendo this year, you can't abandon a +50 millions userbase to which you can sell software so quickly, I expect them to support them 5 or 6 years even if hardware sales remain mediocre.

Blame smartphones...