Hi all,

FYI this should make the world of handhelds more interesting.

Take care,

Jay

3-D Wrinkle for Portable GamingBy MATT RICHTEL and HIROKO TABUCHI,January 2, 2011

http://www.nytimes.com/2011/01/03/te...gewanted=print

Keys, wallet, cellphone ... game machine?

For video game fans, carrying around a portable game player from Sony or Nintendo has become less of a necessity now that they can play games on their increasingly sophisticated smartphones. But in 2011, the game-gadget makers are intent on working their way back into the world’s pockets.

In March, Nintendo plans to introduce the 3DS, the next model in its popular DS line. It comes with a twist: three-dimensional graphics that the Androids and iPhones of the world cannot mimic.

Industry experts who have seen early demonstrations of the 3DS have raved about it. But even Nintendo says it faces unprecedented competition in a smartphone era.

In the year through November, overall sales of software for hand-held devices like the DS and Sony’s PlayStation Portable in the United States fell about 19 percent, according to the market research firm NPD. No wonder, analysts say, given not just the growth in popularity of smartphones, but also the fact that games for phones cost just a few dollars, compared with, say, $30 for a PSP title.

The game makers must persuade consumers to add another gadget to a pile that already includes phones and other game-capable touch-screen devices and tablets. Apple’s iPhone and iPod Touch, in particular, have turned out to be major game platforms.

“Mobile phones and the iPod Touch have killed the hand-held game business,” said Michael Pachter, an industry analyst at Wedbush Securities. He said particular damage had been done at the high end, where parents and children are opting for an iPhone rather than a PSP, and at the low end, where consumers are choosing the iPod Touch over a DS — and then spreading out $100 over 50 games, rather than three or four games for dedicated devices.

But Mr. Pachter argued that with the 3-D graphics of the new Nintendo machine, the company had a chance to attract consumers the way it did with its Wii console, which won over novice gamers with its motion-sensing remote wand.

“The 3DS is sufficiently novel and cool to reverse this trend,” he said, predicting that it would sell out through the end of the year. “It will get people excited, and will make kids and parents forget the mobile phone.”

Not all analysts agree. Evan Wilson of Pacific Crest Securities said the 3DS and the next version of Sony’s PSP would be hard-pressed to reproduce the success of the current models.

“Given the shifts in the market, it’s nearly impossible to sell as many 3DS as they did DS, and nearly impossible for Sony to sell as many of the next PSP as they did the PSP,” he said.

And Nintendo’s 3-D technology comes with a hitch: the company warns that children 6 years old and younger should not play games in 3-D, because viewing these images for long periods of time could harm their eyes.

In the six years since the DS was introduced, Nintendo has sold around 132 million units, compared with sales of around 63 million for the PSP. And sales are not yet played out. During Thanksgiving week, Nintendo said it sold 900,000 units in the United States, down around 10 percent from the same period a year ago.

By comparison, Apple said that through July, it had sold 100 million iPads, iPod Touches and iPhones since the first iPhone was introduced in 2007. Mobile phone adoption among children has soared 68 percent in the last five years, according to the Federal Communications Commission.

Nintendo indicated how difficult it would be to repeat the DS’s performance when, at an annual conference for investors in September, the company’s chief executive, Satoru Iwata, said that to make the 3DS a hit, “we will have to overcome unprecedented challenges.”

The novel touch-screen device does not require users to wear special glasses to see the 3-D images. Nintendo has given few details about the product and has not yet set a price for it in the United States, though in Japan it will cost 25,000 yen, or around $300 — as expensive as a higher-end iPhone with a service contract.

(Current prices vary depending on model, but the PSP now sells for around $170 and the DS for several dollars less, while the latest iPod Touch sells for $230, according to their official sites.)

Sony has been even less forthcoming than Nintendo about its product plans. Last month, Sony’s lead gaming executive said the company had been considering a PSP sequel for years, and suggested that such a device could have a touch screen alongside more traditional controls like buttons and joysticks.

The executive, Kazuo Hirai, acknowledged the popularity of more casual games on phones, but he argued that game-specific devices like the PSP appealed to a player interested in a deeper, more sophisticated game.

“The games being played on Android and Apple platforms are fundamentally different,” Mr. Hirai said. And he argued that game-specific devices could offer better game play with buttons and other physical controllers.

For example, in the PSP action game Metal Gear Solid: Peace Walker, users manipulate a joystick to move the soldier around, hold down another button to draw and aim his gun, hit a separate set of buttons to adjust viewing angles and use a directional, cross-shaped pad to crouch and reload. On top of that, a button on the shoulder of the console fires the gun.

Developers of games played on a touch screen like the iPhone’s, on the other hand, have had trouble creating controls for some types of games. They say even simple titles like Super Mario Bros. would not translate well to the iPhone, for example.

“You can definitely play immersive games better with physical buttons and pads,” Mr. Hirai said. “I think there could be games where you’re able to use both in combination.”

In what could be a nod to the popularity of multifunction devices, however, Sony has also hinted that it was developing a cellphone that would play downloaded games. Last week, Japan’s daily newspaper Asahi Shimbun reported that such a phone could go on sale in the United States and Europe as early as this spring.

Video game executives have argued that the rise of “casual games” on phones would benefit the entire industry by bringing in new players.

“The mobile phone has definitely had some impact on portable software sales, but overall it has helped and buoyed the portable market,” said John Schappert, the chief operating officer for the giant game maker Electronic Arts, where he oversees mobile gaming. “The bigger picture is, there are all these latent gamers, dormant gamers, who bought a mobile phone, and now they’re gamers.”

According to estimates from Electronic Arts, total software sales for systems like the DS and PSP fell 32 percent in Europe and North America in the year ended in September. EA declined to give its own sales figures.

At the same time, Electronic Arts is benefiting from the popularity of games played on the phone and, at one point late last month, was the distributor of the majority of the top paid apps on the iPhone, including Angry Birds.

Electronic Arts has announced only a handful of games for the Nintendo 3DS, but Mr. Schappert argued that its graphics could revitalize the hand-held market.

“It’s a game changer,” he said of the 3DS. “It’s a stunning piece of technology.”

Elliott Foreman, 16, a high school junior and game fan in Austin, Tex., is not convinced. He got his first Nintendo Game Boy five years ago and played it heavily. But then he got an iPod Touch, which became the focal point of his mobile gaming, along with his Droid X phone.

“I like the price of the games a whole lot better,” he said. “I buy a Touch game or an Android game for under $10, every time.”

Elliott said he doubted that the graphics of the 3DS would entice him to buy it, since that would mean yet another gadget to carry around.

When it comes to mobile gaming, he said, “my phone’s fine.”