Nintendo needs to reach back into the innovation bag and try again.
The company announced the third revision to the Nintendo DS line last week, with nothing spectacular to show for it. The DSi - as Nintendo in its infinite wisdom deigned to call it - is almost exactly like the current DS Lite.
It's evolutionary, rather than revolutionary. It adds a number of insignificant features, but it is still basically the same machine. It adds two cameras: one on the outside of the clamshell case and one on the inside, on the hinge. It has internal memory storage and a built-in Web browser. There is also an SD or Secure Digital slot - notably not a SDHC or Secure Digital High Capacity slot - so it is limited to 2 gigabytes of external storage, like the Nintendo Wii. It also adds what is probably the single most-desired missing feature in current generation DSs in the form of WPA 2 wireless security. The screens are slightly bigger but have the same resolution as the DS Lite.
It isn't all upgrades though. It no longer has a slot to fit Game Boy Advance games. Without this slot, it is unable to accept a large number of the accessories that work with the older versions of the DS. No "Guitar Hero: On Tour" for owners of the DSi. Additionally, the larger screens and the more advanced networking come at the cost of an undisclosed battery life.
Underneath the hood, the new DS is still the same old portable console as the previous generation, and the games aren't going to look any prettier. The gaming public is ready for better graphics on its handhelds - this is proved by the success of Sony's PSP, even though most of its games are underpowered retreads of old PlayStation 2 titles. I want a touch screen portable with modern graphics. Of course, I have that, because I own an iPhone.
That brings us to my last point about the DSi. It's ultimately reactionary in nature. The most important feature that it brings to the table is a game store, which is essentially the Nintendo equivalent of Apple's App Store. For the first time, there is a cell phone with the graphics power to match, or possibly even surpass, the current generation of portables. Its biggest advantage is that game developers for the iPhone have no need to compete for shelf space, nor do they have to worry about distribution or packaging costs. Unfortunately, because it's so cheap to develop for, a large number of sub-par games are available on the App Store. The advantage goes to Nintendo because it has a greater capability to control what gets to be sold in its store. This is in many ways the same advantage Nintendo has over the iPhone right now, even with plain old brick-and-mortar sales. Games for the DS are actually good, whereas most of the games for the iPhone are mediocre.
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Nintendo sacrificed a lot from the original DS to gain an advantage the company already has. The company is making a serious miscalculation. It's banking on the app store to carry a $129 price tag on hardware most people already own in one form or another. If it had just bumped up the graphics hardware, just a little bit, it would have a surefire winner on its hands. With this, I fear Nintendo gambled too much on too little.
