What's funny about this is that the 3DS is dominating a retail game market that Nintendo is trying to tame by starving supply of hot new retail releases.
Okay.
"They launched the console at a profit-making price, but dropped it to drive unit sales are are apparently still taking a loss on each unit sold. "
Maybe, but last I heard they planned on resolving that by March 2013. Can't find anything else on that, but I am pretty sure that is no longer true.
"The physical shortages of Luigi's Mansion 2 and Fire Emblem: Awakening weren't happy accidents; they were conscious attempts to drive core gamers to purchase digital copies in the launch window and give Nintendo the fat, fat margins they need to satisfy shareholders who are worried because Wii software sales are drying up and the Wii U is a dog that can't hunt."
I wouldn't say Fire Emblem is a series Nintendo has a lot of faith in (they tend to end up being uncommon / rare) and the shortage was probably more to do with them giving off the impression it sold better than it actually did. I never saw a shortage of Luigi's Mansion 2, but it released the same day as the Pikachu 3DS XL and the buy an XL + Luigi's Mansion 2 or Pokemon and get a free game promotion. Needless to say, if I wanted Super Mario 3D Land, then I would have just bought Luigi's Mansion 2, since I can get two games for the price of one.
"Conversely, Sony launches the Vita and memory cards at a price point that discourages widescale adoption, but the folks who do buy it are core gamers who
purchase digital-only titles in droves."
Yeah... no.
"High attach rate and a high percentage of digital sales means that today's average Vita gamer is worth more (i.e., $ per unit in installed base/year) to Sony than the average 3DS gamer is to Nintendo, probably several times over. "
Yeah... no.
"But the things that make the Vita customer a win for Sony makes them a steaming pile from a retailer's perspective. Consoles and handhelds are low margin. Games are better, and accessories are better still. Even if the Vita was selling better, retailers wouldn't have an incentive to give it a lot of floor space since Vita gamers are buying a lot of content online and don't buy as many of the goofy accessories as kid 3DS owners (Pikachu stylus!?). There just not a lot of money for a Best Buy, Target, whoevever to make on Vita sales."
I don't know where you get this idea that every single person is super attached to DD (I'm not going to talk about shipping games, since there are a lot of people out there that love to just Amazon everything and isn't unique to the Vita). Most people that own a Vita (and to a lesser degree the 3DS) only buy digitally under two circumstances...
1) It's free with Plus.
2) It's extremely cheap (like Katamari for $3 dollars).
If people were so into the digital idea, then we would see more people pushing / accepting the memory card prices. Since those are a bit high for the average person, you're seeing most people stick with hard copies.