"For anyone who was on the fence about buying a Nintendo 3DS, this is a huge motivation to buy now,"Nintendo of America President Reggie Fils-Aime said in a statement.
The 3DS got off to a solid start when it launched but has since lost momentum. Analysts cite a lack of compelling content for the device and say consumers may now be waiting for Sony Corp.'s upcoming release of the new PlayStation Vita handheld, which will sell for $299 in the U.S.
Such a big price cut so soon after a product's launch is unprecedented for Nintendo, and it's likely to annoy the loyal fans who have already bought the device, said Eiji Maeda, an analyst at SMBC Nikko Securities in Tokyo.
It took almost three years for the company to lower the price on the Wii for the first time, and that was by $50.
"This shows that Nintendo feels it really needs to lift up the 3DS," Maeda said.
The Kyoto-based company also faces increased competition from smartphones and games on social networks, particularly among the casual gamers it targeted with the Wii. At a recent general shareholders meeting, President Satoru Iwata told investors Nintendo would not compete directly with smartphones by adding extra functions to the 3DS.
A strong yen hasn't made things any easier. About 80 percent of Nintendo's sales are from outside of Japan, making it vulnerable to currency fluctuations.
Sales during the quarter slumped more than 50 percent to 93.93 billion yen, leading to an operating loss of 37.71 billion yen.