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GBA Launch Talk: The battle begins

by Billy Berghammer - March 19, 2001, 4:11 pm EST
Source: Reuters

The GBA launch is just 2 days away! Here's a very intense look at it from the business standpoint.

It seems like this week in Japan, all eyes are on Nintendo to score big with the launch of the Game Boy Advance. Is Nintendo on the road to clean up? Read on....

TOKYO, March 19 (Reuters) - Japan's Nintendo Co Ltd is set to ignite the biggest battle yet in the video game market with its long-awaited launch on Wednesday of Game Boy Advance, successor to the world's top-selling Game Boy handheld machine.

On the surface, the new box is a small and simple portable game machine just like its predecessor, Game Boy Color. But the screen is 50 percent bigger and its image processor is three-times faster, running at 32-bits, up from eight-bits -- a renovated home for its massively popular Pokemon character.

Nintendo, whose cumulative sales of the 11-year old original Game Boy topped 100 million last year, plans to ship 1.1 million units of the new version in March with a target of 24 million by March 31, 2002.

It's an ambitious target that analysts say is within grasp due to a lack of viable alternatives in the portable game market, and the new Game Boy's relatively low price tag of 9,800 yen ($79.58).

``The success of Game Boy Advance is a no brainer as there is no real competitor,'' said Lisa Spicer, senior analyst at ING Barings in Tokyo.

But despite the lack of competition in the portable market, Nintendo may have Sony Corp and Microsoft Corp (NasdaqNM:MSFT - news) worried. Their bigger, Internet-enabled home video game machines are targeting the same young, game-savvy players.

``An intensified fight will take place this year and next to grab a larger share of the market. This will be followed by another round in the high-speed digital network era which is expected to arrive in 2003,'' said Hirokazu Hamamura, editor in chief at Japan's leading video game magazine, Weekly Famitsu.

``The fight between Nintendo and Sony will be even. Microsoft may be able to take a large share in the U.S. and European markets, but there are so many uncertainties on the software lineups.''


Sony has been gearing up to turn its powerful and DVD-capable PlayStation2 game system into a digital entertainment platform by offering cables to link it with mobile phones from March and an option for using a hard disk later this year.

The idea is to allow users to connect to the Internet and download data and software to the game computer system, which sells at 39,800 yen ($299 in the United States) each.

A similar strategy is being used by U.S. software giant Microsoft, which is scheduled to break into the highly competitive video game market by releasing its ``Xbox'' console in the second half of this year at a similar price.

Nintendo says it is taking a different approach.

``Our focus will strictly stay on games, different from those of Sony and Microsoft,'' said Nintendo President Hiroshi Yamauchi.

Most of the 25 new game titles to be launched with Game Boy Advance can be played by two to four users by linking up their machines through connecting cables.

The new Game Boy is ``backward compatible'', meaning existing titles for Game Boy can also be used on the new version.

Nintendo's 73-year-old president added: ``Pokemon, which ran on the 8-bit machine carrying far less memory than PlayStation2, was the world's top selling software last year.''

``Sophisticated features such as beautiful pictures and heart-stopping sounds are not what gamers are really looking for. They just want to have fun''.


UBS Warburg analyst Takiko Mori contributes the success to Nintendo's strength in developing killer titles such as Pokemon and the Mario series.

``They are like Walt Disney's Mickey Mouse. Game Boy Advance sales will exceed 100 million in four to five years, partially fuelled by the next Pokemon series to be released for the Game Boy Advance.''

``Third-party software houses are gearing up on Game Boy Advance game development since they believe the machine will be one of the core game consoles in the battle for next generation video games,'' Mori added.

She said the estimated cost of developing a PlayStation2 game is between 200-300 million yen, far above about 20-60 million yen for the new Game Boy.

Nintendo's policy of keeping its products simple is reflected in its GameCube home console, due to be launched later this year. It comes in a small toy-like box and offers no DVD functions, although it does provide a link to the new Game Boy.

Industry specialists see the three-way battle as likely to lead to Sony's victory in terms of the number of platforms sold, but they say Nintendo fans are more dedicated game players and buy more games per machine.

They add that Microsoft could succeed in the U.S. and European markets, but faced a tougher time luring veteran game players.

``Microsoft needs to provide fun games so that they can grow the market,'' ING's Spicer said. ``But Microsoft's ability to create killer titles like Nintendo is unknown''.

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