Tuesday, June 20, 2006
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Nintendo's Newest Product Aims for Adults
Published: September 21, 2004
AN FRANCISCO, Sept. 20 - In a shift in strategy, Nintendo is expected to announce on Tuesday that it plans to begin selling its next generation of hand-held video game devices in the United States in time for the coming Christmas season.
The company is also hoping that by selling the new device, the Nintendo DS, for adults and older teenage video game players first in the United States, it can avoid a direct confrontation with Sony, which is about to enter the hand-held game market in Japan with a device of its own.
The Nintendo DS will go on sale in the United States on Nov. 21 for $149 and will be introduced in Japan on Dec. 3. It will be the first time Nintendo will market a major product in the United States before selling it in Japan. The announcement comes days before the start of the Tokyo Game Show, which is scheduled to begin Friday in Japan.
Sony and Nintendo are both trying to broaden the market for hand-held game devices that will be able to offer other entertainment features like music, video and wireless Internet connections.
The Nintendo DS is a novel system that has wireless capabilities and two display screens, which the company hopes will encourage software developers to come up with new types of games.
Nintendo, however, needs to overcome skepticism within the industry that it will be able to expand its reach in the game market beyond children and young adolescents, who are the main users of its Game Boy and Game Boy Advance devices. Until now, the company has had the hand-held game market to itself.
Industry executives said that Nintendo's aggressive pricing of the new Nintendo DS would put pressure on Sony, which was expected to introduce the Sony PSP - Sony's first hand-held game device - late this year in Japan at about $300.
Several executives also said they believed that Nintendo, by choosing to sell its new product in the United States first, would gain momentum and avoid an immediate loss to Sony, which is likely to get a better reception in the Japanese market.
"The PSP is a really hot piece of hardware," said one game industry executive, who has seen both devices.
Other analysts, however, noted that the Nintendo DS was also likely to find a ready holiday market in the United States, where it would be seen as an easy upgrade from the earlier Nintendo systems.
"Christmas matters here," said Michael Pachter, a financial analyst at Wedbush Morgan Securities, "It will be a very easy thing for a parent to purchase a DS" for an older teenager, and give the Game Boy Advance to a younger sibling in the family.
Nintendo executives said they were committed to the idea of positioning the new system for an older market.
"We've been saying from the start that we wanted to position the DS toward an older audience," said Reggie Fils-Aime, executive vice president for sales and marketing for Nintendo of America, "but the market didn't believe that's where we wanted to go."
Nintendo executives said that 100 companies were developing games for the new device and that Nintendo was planning to release 20 games of its own development. The DS will also be able to play existing Nintendo hand-held games.