Powerful Japanese gaming system maker Nintendo lowered the price of its 3DS handheld game console and annual profits expectations after sluggish sales led to a greater than expected earnings loss.

Nintendo dropped its 3DS price down to $169.99, a $80 discount from the retail price of $249.99, in part because sales just aren't as good as the company expected.

It also cut its annual profit expectations a stunning 82 percent. The company now expects profits of only 20 billion yen after initially expecting profits of 110 billion yen.

Nintendo had put a lot of emphasis on the 3DS but didn't see the sales numbers it expected. It sold 710,000 units between April and June, a number that the company expected to reach on the first week of its release. Worldwide it has sold 4.32 million units, but only a little over 800,000 in the United States.

"For anyone who was on the fence about buying a Nintendo 3DS, this is a huge motivation to buy now," said Nintendo of America president Reggie Fils-Aime in a statement.

The company hopes to sell 16 million units by the end of the year.

In addition to lowering the price of its 3DS, the company is also offering customers a chance to download yet-to be released games for free. The company is offering up to 20 free games to any 3DS owner that visits its online eShop before 11:59 EST on August 11th.

The program, called "Nintendo Ambassador," would give the customer access to such games as: Super Mario Bros., Donkey Kong Jr., The Legend of Zelda, among others. Some of these games have never been released to the public and will only be able to ambassadors.

These measures come after Nintendo posted a second quarter loss of 347 million. It's the first time Nintendo posted a quarterly loss since 2004, when the company first began to report its earnings every three months.

Additionally its revenue profits were 50 percent lower than last year's quarter. Part of the lack of sales can likely be contributed to the rise of smartphones and tablet computers over the last few years.

Apple sold a stunning amount of iPhones and iPads in the last quarter, all of which offer a wide variety of game apps. These devices added onto what has always been a competitive gaming system market makes it difficult for handheld gaming consoles to catch on.

Nintendo is banking that a price cut on the 3DS will help it catch on, as a similar measure did for the original DS, but in this current market it's no guarantee.