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Nintendo DS Plays the Phone Card

14 Sep, 2004 By: John Gaudiosi

The portable Nintendo DS is expected to ship in the United States Nov. 21 at $179.99, according to analysts and retailers. Sources also indicated the price point could be as high as $199.99. With Nintendo announcing the price drop of its current Game Boy Advance (GBA) SP to $79.99, that gives the new dual-screen portable gaming device at least a $100 price differential.

A new development shows why gamers, even those who already own a GBA SP, might make the leap to DS. In a recent Electronic Entertainment Industry Update (Aug. 31), TNI Securities equity research analyst Boris Markovich said that Nintendo DS will ship with an external microphone headset port that allows gamers to use voice-over-IP chat using the built-in wireless 802.11b network.

“In addition to the speakerphone, the headset will allow gamers to use the DS as a phone handset enabling free calls over wireless network hotspots,” Markovich said in the report. “We think that this will be a very compelling application of the handset and will help drive adoption among the increasingly connected younger game audience.”

Free phone calls would certainly make up for the price differential and also impact sales of Nokia's N-Gage QD cell phone gaming system, although there was no mention as to whether this phone feature would be limited to DS-to-DS calls. Nokia recently announced sales of 1 million N-Gage phones. The DS is also expected to retail below Sony's PSP price point, which has been speculated to be in the $249 to $299 range when that portable gaming unit ships in March 2005.

Nintendo previously confirmed that the DS will feature an internal microphone, and the console has the ability to use voice as a control system for games as well as for communications between players. Coupled with the touch-screen pad, innovative new types of games are expected to ship to retail over the coming years.

Reggie Fils-Aime, EVP, sales and marketing, Nintendo of America, spoke to a private gathering in California Aug. 10. In that speech, he announced that Nintendo DS will be equipped to wirelessly connect 16 players in close proximity to a single game. In addition, the DS will also be equipped to allow long distance connections via a wireless Internet browser.

While Nintendo has been quiet on the Nintendo DS price point, release date and number of launch titles, the Japanese game maker has said that 120 games are in development for its dual-screen system.

Nintendo is developing 20 games internally and has signed on 100 companies to work on software. Since DS is backwards-compatible, it will also play the thousands of GBA games on the market.

Games will be the key driving force behind Nintendo DS, and games are what have enabled Nintendo to dominate the portable handheld market for 15 years. The company has sold more than 20 million GBA SPs worldwide since launch.

Nintendo has forecast sales of 3 million Nintendo DS units through the end of its fiscal year in March 2005.

“Because of the backwards capability, there will not be any cannibalization of the GBA SP market,” Markovich said. “I expect Nintendo to support GBA SP for awhile and then phase it out over time.”

Markovich said that because Sony is aiming at an older demographic with its PSP, he believes there will be room for both Nintendo DS and PSP. He also said that Sony is focusing more on games than movies, at least at first. Outside of Sony-owned films, Markovich expects that movies will slowly be phased into the PSP library.

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