As of this Friday, the Nintendo 3DS will be $169.99. The price cut will be the first since the system's launch just five months ago, and is more than a 30% reduction. The bold, sudden move forced Nintendo to revise its financial forecasts, which painted a tough future for the company. Earnings potentially as low as they were in 1986? Significant losses for the prior quarter? Pay cuts for executives?

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Yet much of this turmoil is, in fact, being caused by Nintendo's aggressive move to boost the 3DS Reggie Fils-Aime . Today I had a chance to briefly chat with Fils-Aime about the current situation with the 3DS. Be sure to check out IGN Wii as well – I asked him about the"This is a momentum driven business. When you have momentum, it can work in your favor. When you don't have momentum, it can be a really tough situation. For us, this is all about making sure we have strong momentum for Nintendo 3DS," Fils-Aime told me. It turns out the Nintendo of America COO's strategy to regain said momentum - which he views as a mixture of sales, positive consumer word of mouth and belief in the system on behalf of retailers and third parties - doesn't end with the price cut.In support of the new price, Nintendo plans to launch the "Flame Red" version of the 3DS alongside Star Fox 64 3D on September 9. From there the publisher has one major franchise arriving on the system each month – Pokemon Rumble Blast on October 24, Super Mario 3D Land in November and Mario Kart 7 in December. All of this is in addition to a variety of third party support and a "continued push on the digital front."Yet a price cut of this magnitude signals a problem (or two or more) with the 3DS system that can't be ignored. No company would slash the price of its hardware if it wasn't absolutely necessary, after all. I asked Fils-Aime to reflect on the 3DS's young life. Where did the momentum dip? Why?"When we were preparing to launch the 3DS, we had very positive signals. High levels of pre-orders. High levels of buzz. High levels of interest. Even things like search activity, which we measure, were all very positive and very robust," Fils-Aime said. "That led to a very strong first day and very strong first few weeks of sell-through. Following that is when we began to see some slowdown of momentum."I would characterize the key factors as being… first party games, like Ocarina of Time or Star Fox, should maybe have been made available more quickly after launch. That might have been a missed opportunity. And then secondly, not launching the eShop until June was certainly something that negatively impacted our momentum. I would point to those two factors as being significant ones that took some of the wind out of our sails following a positive few weeks after launch. As we take away those lessons and apply them to future launches, we need to look at things like key first party titles are launching much earlier in the launch window."