Japanese video-game software makers are working to prevent Sony Corp's PlayStation series of consoles from dominating the US$20 billion industry, which last year saw new entries from Microsoft Corp and Nintendo Co.
Game software makers say they're betting on Nintendo's GameCube, the game console the Kyoto-based company unleashed in the US in November. With its emphasis on game play, the GameCube will probably take market share away from Sony's PlayStation 2 in coming years, game designers said.
"It's best when two or three console makers co-exist," said Keiji Tanaka, a managing director at Namco Ltd, the company behind "Pac-Man." "GameCube and [Microsoft's] Xbox can compete against PlayStation 2 and expand the video-game market."
Before Sony entered the business, Nintendo was the leading console maker. Nintendo's leadership gave it the power to dictate the fees designers paid to develop games. With PlayStation 2 now dominating the market, there's a threat that will happen again, giving Sony sway over the profit margins of gamemakers through its influence on the software retail market.
"GameCube may not become as dominant as the PlayStation 2, but will sell far better than its predecessor, the Nintendo 64," said Ken Uryu, an analyst at Merrill Lynch Japan Inc in Tokyo. "Nintendo is succeeding in luring software developers."
Banner year
Makers of consoles, games and accessories are heading for a banner year. Video-game console shipments are projected to reach 49 million units this year, up from 29 million units in 2001, according to Gartner Dataquest Inc.
While Sony has racked up PlayStation 2 sales of more than 23 million units worldwide since the console reached store shelves in Japan, it has been largely unchallenged. That may change.
Sony last week said it sold more than 5 million PlayStation 2s worldwide during the holiday shopping season. Microsoft Chairman Bill Gates said his company had sold 1.5 million Xbox consoles and is selling more than three game software titles per system in its first foray into the video-game market.
Nintendo has said it expected to sell 1.3 million GameCube consoles by the end of 2001 and an additional 1.4 million in Japan. GameCube debuted in the US Nov. 18 and on Sept. 14 in Japan. That's encouraged software makers who design games for the GameCube, a device that comes in purple, black and orange.
"We received many orders for video-game software for the newly launched console," said Jiro Sakaguchi, director of Tose Co, a Kyoto-based maker of versions of popular game software for other companies. As a result "earnings for the fiscal year to August may exceed our initial forecast."
Still, concerns that Sony will continue to dominate abound.
Nintendo's shares have declined about 15 percent since Jan. 1 compared with Sony's 1 percent rise.
Even with the recent drop, though, Nintendo's shares have still gained since the GameCube's Japan debut. The shares are up about 22 percent since sales began on Sept. 14. Software may have a big role to play in that performance.
Nintendo, the creator of video-game classics such as "Donkey Kong," will have 41 titles available in the US for the GameCube by March, Mori said. Software will include games exclusively developed for the GameCube, including "Star Wars Rogue Squadron II: Rogue Leader" by LucasArts and Sega Corp's "Sonic Adventure" and "Virtua Striker3."
RSS