E3, the must-attend convention for the gaming industry held several weeks ago, was "all about portable gaming," said Michael Gartenberg, VP-research director at Jupiter Research. "We're going to see the noise crank up very soon and very quickly."
Both Sony Computer Entertainment and Nintendo unveiled their hand-held devices at the show, allowing game developers and publishers the first chance to pick them up and play. "They'll both have to reach the influencers," said Zelos Group analyst Billy Pidgeon. "Word of mouth is the way game systems and games are sold."
The two companies will go head-to-head with the introductions; Nintendo first with a worldwide release for the holiday season in North America and Japan, and a rollout in Europe for the first quarter. Sony's launch in Japan is planned for the end of year, followed by a first quarter 2005 launch in North America and Europe. Marketing efforts will include traditional advertising campaigns, but expect plenty of promotions, event marketing, product seeding and contests in building important word-of-mouth credibility with gamers. Nintendo and Sony's past console launches in Japan have inspired thousands to wait outside stores for days in anticipation. Anxious E3 gamers waited hours to play with both new units.
The silver Nintendo DS (dual screen) has two 3-inch screens and folds in half. The bottom screen is touch-sensitive and works with a stylus for game control as well as messaging. The black Sony PSP (PlayStation Portable) is virtually all screen (4.3 inches) with button controls on either side. It has the ability to play movies and music as well as games. Both devices also include Wi-Fi connectivity.
Part of the excitement around the releases is the sophistication in graphics and quality of play now available. But another level of excitement is building, with the marketers and industry watchers who see these devices as a way to drive the portable-gaming market forward. The potential is in gaming's big gap; that is, the lack of ownership of hand-held devices of men and women ages 18 to 34. Jupiter Research predicts the audience for portable gamers will grow from 23 million in 2003 to 43 million in 2009 with revenue jumping from $1.6 billion to $2.7 billion during that same time period.
"This is a big untapped market," Mr. Gartenberg said. Sony spokeswomen Teresa Weaver agreed, saying, "We are only interested in entering a market to grow a market."
Until now, Nintendo has owned the hand-held-gaming market with more than 168 million hardware units sold in 13 years. However, the place where Sony seeks to challenge Nintendo, and the place Nintendo wants to migrate, is for those young-adult gamers who don't play on hand-helds. The trend has been that older-teen and young-adult gamers move to consoles and stop portable gaming until they get older. About one-third of Nintendo's users are over 18, said Perrin Kaplan, Nintendo of America VP-marketing and corporate affairs. That number has grown in recent years and shows the company how much this market can stretch even further with DS. "In many ways, it is the year of the portable."
"GameBoy never went any further than pre-teens," Mr. Pidgeon said. "The trick is to age the market up. When college kids want it ... so will high school kids and on down."
Pricing has yet to be determined, although industry estimates are anywhere from $150 to $250, with Sony PSP looking to be the more expensive machine. Nintendo has not come up with a price for the DS yet, though Ms. Kaplan said, "Nintendo prides itself on affordable pricing and we're very experienced at it."
While Sony and Nintendo are fighting for the same group's attention, analysts said the machines are diverse enough to attract different gamers. Sony's PSP, for instance, will offer music and movie viewing. "Gaming is first and foremost; after all, we are PlayStation. But we are Sony, too, so movies and music will follow," Ms. Weaver said. Nintendo on the other hand, offers the dual screen for games, as well as the touch screen with Wi-Fi for instant messaging.