Portable Game Players to Test Video Appeal
Sun Apr 4,12:44 PM ET Add Technology - Reuters to My Yahoo!
By Franklin Paul
NEW YORK (Reuters) - For handheld video game makers like Nintendo (news - web sites), a popular TV character like SpongeBob SquarePants may be cute, but he's no moneymaking match for video game heavyweights such as Super Mario or Donkey Kong.
In coming months, handheld video game players like Nintendo Co. Ltd.'s (7974.OS) Game Boy plan to add video capabilities to show cartoons and, in time, movies, but industry analysts say video entertainment will always play second fiddle to the popularity of interactive games played on the portable devices.
"The track record of peripherals (for game handhelds) has been mixed," said RBC Capital Markets analyst Stewart Halpern. "Peripherals may make the platform more appealing, but I don't see video as critical to Game Boy. Ultimately, it is a games-playing machine."
Sales of video game hardware and software make up more than $10 billion annually. But the game industry is now in a lull awaiting new, faster game-playing devices.
During periods like these, companies typically try to extend the life of older game players by cranking out new software. This year, it is video programs of popular TV and movie characters like SpongeBob.
Starting in May, Edison, N.J.-based Majesco, a unit of ConnectivCorp. (OTC BB:CTTV.OB - news), will sell video cartridges that make the Game Boy Advance (GBA) like a mini-DVD player with the buttons controlling functions like advance and rewind.
Retail demand has been strong for the titles, which include Jimmy Neutron, Teenage Mutant Ninja Turtles, SpongeBob SquarePants and Pokemon, thanks to licensing deals with 4Kids Entertainment (NYSE:KDE - news) and Viacom Inc.'s (NYSE:VIAb - news) Nickelodeon.
Each $20 cartridge, made possible by Majesco's technology that compresses the video, will carry several episodes comprising some 45 minutes in all. Cartridges carrying 90 minutes will be available later this year, Majesco said.
21st CENTURY WALKMAN
The new line comes as Sony Corp (news - web sites). (6758.T), whose PlayStation 2 (news - web sites) dominates the video game console market, prepares to unveil Sony PSP. Sony executives have touted the device as "the Walkman of the 21st century" for its ability to play games, movies and music.
It would enter a handheld market ruled by Nintendo's Game Boy Advance, which has sold more than 20 million units, including seven million alone of the Game Boy Advance SP, a backlit version the size of a Post-It note pad, introduced a year ago.
Schelley O'Hara, an analyst at research firm IDC, said that while young children may enjoy SpongeBob episodes in the back seat of the car, few teens or adults would view "The Matrix," on a Game Boy or PSP, particularly when they can do the same at home or on a laptop computer.
"Just because the capabilities are there doesn't mean that they will be utilized," she said. "(Handheld) video is an interesting application, but it may be a drain on battery power, and the screens are too small" for watching anything beyond cartoons.
Busy adults also are drawn to passive pocket-sized devices, like portable music players, since they can be used while walking, exercising or driving. Video, however, typically requires a viewer to be still for long periods of time.
George Harrison, vice president of marketing at Nintendo of America, said the company sees "GBA Video" as an add-on product, one that does not detract from its bread-and-butter gaming business.
"It is an incremental opportunity for us to sell software. We do not (add functions) if it takes away from the core benefit of the machine and game play," he said.
Harrison declined to discuss many details of Nintendo's new handheld game device, which is so far is being called "DS." He said it has two screens, would likely cost more than $99 and would be unveiled in May at the E3 gaming industry conference in Los Angeles.
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