Nintendo Co has pinned its hopes for a comeback on a 3D--capable handheld game player after losing ground to rivals Sony Corp and Microsoft Corp.
The Nintendo 3DS, slated for a debut early next year, is expected to accomplish what almost no 3D movie screen or pricey new flat screen TV has been able to do: bring videos and images to life without bulky glasses.
“The Nintendo 3DS will provide a 3D gaming experience that these other companies cannot. That’s going to be a huge competitive advantage,” Nintendo of America president Reggie Fils-Aime told reporters in a recent interview.
Nintendo, which posted three years of record earnings on brisk Wii and handheld sales until March last year, is now facing a challenging holiday season. The new -handheld game system will not be ready in time for the busiest retail period of the year and the company forecasts an annual profit that will be its lowest in five years.
The Japanese company’s once prodigious hardware sales have slumped, with sales of the Wii video game console system down 13 percent last quarter. DS sales have also sunk 43 percent year on year.
Rivals have stolen headlines away from Nintendo this holiday. Microsoft’s Kinect and Sony’s Move controllers have improved upon the Nintendo Wii’s motion-gaming technology. Meanwhile, Apple Inc and Google Inc’s Android have chipped away at Nintendo’s handheld gaming market share. A stronger yen has also hurt Nintendo’s bottom line.
All this comes at a time when software and hardware sales — the main driver of the US$60.4 billion global video game industry — are in retreat. US video game sales are down 8 percent this year on top of an 8 percent drop last year, according to NPD.
Nintendo’s 3DS’ arrival on Feb. 26 in Japan and in March in the US, could help revive Nintendo’s sales growth, Sterne Agee analyst Arvind Bhatia said.
“Once it comes out, it’s going to have a few quarters of strong momentum and it’s going to provide a catalyst for the stock,” Bhatia said.
The 3DS also appears to be Nintendo’s most aggressive bid for an online gaming presence, an area where the company has lagged behind Microsoft, whose Xbox Live service has 25 million players worldwide.
Fils-Aime called the 3DS Nintendo’s most connected device yet.
Users will be able get online games without going through the manual steps of connecting to the Internet to download content. Finding and playing games on the 3DS will be more convenient than on smartphones, Fils-Aime said.
“Even today on your mobile device of choice, for you to download a piece of content, you need to take the action,” he said. “We’re recognizing that a key opportunity is for the device to do it on its own.”
While Fils-Aime said that 3 million users stream Netflix through the Wii, the 3DS can better position Nintendo against Sony and Microsoft, whose consoles have become living room media players that play music, movies and TV shows.
Fils-Aime said media would be “certainly be a part of the proposition” of the 3D device, pointing to media partnerships announced in Japan at the end of September. Nintendo partnered with Fuji TV to distribute 3D videos to the device.
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