It's 2001 all over again. Only this time, Nintendo doesn't have anything to fall back on. In the late '90s and early 2000s, Nintendo ( NTDOY ) attempted to run its console business into the ground by releasing a lackluster follow-up, GameCube, to a lackluster system, Nintendo 64. At that time, Nintendo owned the handheld gaming market. The Game Boy, Game Boy Color and Game Boy Advance provided Nintendo with billions of dollars in profit. As a result, Nintendo was able to relinquish its spot at the top of console gaming and still become one of the industry's most profitable companies.
By releasing the Nintendo 3DS without any good games, and by charging a price ($249.99) far beyond the system's worth, Nintendo was forced to cut the price several months (years!?) ahead of schedule. In what seemed like an instant, the company lost its cash cow -- the handheld market -- and saw its market cap drop 50% in the following months.