Spot On: The Nintendo DS

After months of speculation, Nintendo unveils its secret "innovative machine" to a decidedly mixed reaction.

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At a Tokyo strategy meeting last August, Nintendo president Satoru Iwata announced his company had something big in the works. "I want to release a very different product," he said, "and by next spring we'll be ready to announce the details." Three months later, Nintendo's executive director Jinyou Mori told Famitsu that an "innovative machine" was going to be unveiled at the 2004 E3 expo in Los Angeles.

The executives' cagey comments launched a thousand rumors. What was Nintendo planning to unveil in 2004. Had Nintendo somehow leapfrogged ahead of the PlayStation 3 and Xbox 2 in the next-gen console race? Was it planning the so-called Game Boy Enhanced, a portable device that could play both Game Boy Advance and GameCube games? Or did were they going to follow Monty Python's example and give us something completely different?

But when Nintendo finally announced its "innovative machine"--the Nintendo DS--on Wednesday night, most people weren't prepared for how different the machine actually was. While Nintendo didn't release any pictures of the portable game system, it did reveal its schizophrenic design. The DS will sport two separate, back-lit 3-inch TFT LCD screens, to give players both an overview and a zoom-able close-up view. It will also have two separate 32-bit ARM microprocessors: a primary CPU from the ARM9 line and a ARM7-family subprocessor. ARM processors are commonly used in cell phones, PDAs, and other many handheld devices--including the Game Boy Advance SP.

Unfortunately, Nintendo was less forthcoming about software, saying only that the DS would be "marketed separately from the company's existing Nintendo Game Boy Advance portable system and Nintendo GameCube home console." In other words, the DS it won't play GBA or GC games, and developers will have to get familiar with a whole new format. Officially, that's no problem. "We’re talking with third-party developers, and the initial reaction is very positive," said Perrin Kaplan, Nintendo of America's vice president of corporate affairs. "They’re very intrigued about the software possibilities."

Some analysts agree with Kaplan's assessment. "A new platform means new revenue opportunities," American Technology Research analyst P.J. MacNealy told GameSpot. "Resource allocation will vary by publisher, and those publishers with scale, such as Electronic Arts, will have the advantage early on." However, Wedbush Morgan's Michael Pachter is more skeptical. "Publishers learned in 2000 that it's foolish to abandon the installed base to chase the next great thing," he said. "Everyone will produce at least one game on the DS in order to learn the mechanics, but if it launches with 12 games, it will look a lot like the N-Gage."

Indeed, the lackluster specter of Nokia's poorly received game deck is already hanging over the DS. Doubts about its very concept are rampant. "I can't understand why two screens are required rather than a split screen," said Pachter. "If the device is a GBA SP with two screens, I don't think it will command much of a premium." Some industry insiders were less kind, comparing the DS to Nintendo's greatest hardware debacle, the Virtual Boy. "The DS sounds very gimmicky to me," a source at a major publisher told GameSpot. "It's like a 'Crazy Ivan' response to the PSP."

Officially, Nintendo downplays the rivalry between the Sony's sleek-looking PSP and the DS. "Since so little is known publicly about either Nintendo DS or PSP, it is difficult to draw comparisons," said Kaplan. However, the DS is being unveiled at this year's E3 expo in Los Angeles--the same event where the PSP is making its debut. "The main driver behind this DS announcement is to help position Nintendo’s messaging heading into E3," said McNealy. And while Nintendo hasn't made it official, analysts expect the DS to be released concurrently with the PSP in Q4 2004--a head-to-head contest that it is unlikely to win. "I think that PSP will be a category killer with older gamers," said Pachter, "I don't think the DS will sell, but it's way too early to tell."

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