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Nintendo DS to Support Video and Games

30 Mar, 2004 By: John Gaudiosi

With Sony pushing back the North American release of its Portable PlayStation (PSP) to March 2005, Nintendo has a window of opportunity for its newest handheld device, Nintendo DS. The new handheld, which won't replace the Game Boy Advance SP, is on target for a simultaneous North American and Japanese launch this fall (likely in December). In a break with Nintendo tradition, the device also will play video.

Nintendo DS will make its first public debut at this May's E3 show in Los Angeles, with 12 games. The Nintendo DS games are expected to retail for between $19.99 and $29.99. The wholesale cost for these games will likely be $16 for $19.99 games and $24 for $29.99, with a split of royalties between Nintendo and the game publisher.

Nintendo has not announced the price of the hardware device, which will support two three-inch screens for new gaming innovations. P.J. McNealy, senior analyst at American Technology Research, believes the system will find the most success at $149. The price could be as low as $129 or as high as $199. Nintendo is expected to reduce the price of GBA SP to $79 this holiday in conjunction with the launch of the second handheld.

“I expect Nintendo DS to sell for sub-$200 and Sony's PSP to sell for north of $200,” said McNealy.

One key difference in Nintendo's new portable gaming system is that it will play more than just games. Breaking a tradition of all previous Nintendo game consoles and portables, Nintendo DS will support multimedia. Two hours of video, enough to port movies to Nintendo DS, have been demonstrated on a 128 MB Matrix semiconductor next-generation memory card, according to McNealy. This puts the device in the same company as Sony's PSP, which will have a full lineup of games, movies and music available on its proprietary Universal Media Discs in March.

Majesco Sales' video compression technology, which will launch with its GBA Video lineup in mid-May, is also compatible with Nintendo DS. Majesco is presently seeking out Hollywood TV and movie licenses to compress and publish them for Nintendo's GBA. The game publisher has already cut a number of TV deals for GBA Video with the likes of 4Kids Entertainment and Nickelodeon (VSM, March 21-27).

“We hope to use our GBA Video technology on Nintendo DS,” said Ken Gold, VP of marketing, Majesco Sales. “Once we get a working model, we'll hopefully begin to move on that.”

Gold said he's focusing on the second wave of GBA Video titles and waiting for Nintendo to introduce its 32MB cartridge, which will allow Majesco to compress 90 minutes of video onto a cartridge that will likely retail for $29.99.

With Majesco serving as the publisher for content on GBA and eventually Nintendo DS, content providers would license TV and movies in exchange for royalties. Majesco would handle compression, publishing and distribution of the content. Nintendo would likely help establish a separate box type for Nintendo DS and carve out retail space separate from Nintendo DS games, as it's doing with Majesco's GBA Video lineup.

Nintendo is targeting older gamers ages 19 to 24 as well as the IM (instant message) generation with the Nintendo DS. The new gaming device will ship with a stylus and IM capabilities. Nintendo DS also will support free online gaming for its titles. More than 40 percent of GBA owners are 18 years or older, and this number is expected to increase with the new device.

“The entire market has gone multimedia because technological advances allow affordable screens that can display movie and TV footage,” said McNealy. “Nintendo has to broaden its offering past just games, and video is the first, easy step.”

The shift from a games-only device to a multimedia device is a key change in Nintendo's overall philosophy. If Nintendo can ship its new portable system this fall on time and with ample hardware and software supplies, McNealy believes the company will make a significant first step in a category it already owns. With Sony's PSP waiting in the wings, the more units Nintendo can sell to establish its new multimedia player, the better. Top publishers like Activision, Electronic Arts and THQ are already developing games for Nintendo DS, and that number is expected to grow.

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