Nintendo Joins Market for Net-Ready Consoles
Nintendo Co. jumped into the already crowded market for Internet-ready video-game machines Thursday when the Japanese entertainment giant unveiled its new GameCube to compete against similar machines developed by Microsoft Corp. and Sony Co.
But concerns over manufacturing issues, as well as delays in pulling together a strong line of software titles, means that the GameCube won’t hit store shelves in the U.S. until next October. The device, which has not been priced, will be available in Japan in July.
Industry analysts question whether the delay will hurt Nintendo, which is seen as a secondary player behind rival Sony and up-and-comer Microsoft.
By the time the GameCube reaches North America, Sony’s much-heralded PlayStation2, billed as an all-in-one entertainment center that also can let people listen to music CDs, watch DVD movies and surf the Web, already will have a yearlong head start. Sega’s Dreamcast was released last year, and Microsoft’s X-Box is expected to roll out by next fall.
“The worst thing we can do is launch hardware without enough software in place,” said George Harrison, a vice president with Nintendo of America Inc.
Indeed, Nintendo learned that lesson in 1996, said James Lin, managing director and senior analyst with Sutro & Co. “They were crushed in Japan when the [Nintendo] 64 launched with only a handful of titles,” Lin said. “They won’t make that mistake again.”
On Thursday, Nintendo shares fell $2.81, to $174.65, in trading in Japan. The company released its news after the market closed.
Given the competition, Nintendo is making a device that does only one thing--play games. Though the GameCube uses a proprietary DVD system, it won’t play DVD movies, officials said.
Consumers will be able to play games with one another in the living room. And after purchasing an optional adapter for broadband modems, users will be able to virtually battle one another over the Internet.
Betting that hard-core game fans will wait a year, and pass on the all-in-one PlayStation2, is a risky move, analysts said.
“A lot of people are wowed by being able to use one machine for both,” said David Cole, chief analyst for the new-media research firm DFC Intelligence. “What Nintendo has, however, is its franchises: Pokemon, Mario Bros., Donkey Kong.”
Nintendo also is the leading software publisher for the video-game industry, Cole said. That’s a crucial edge in a world where a single software title can persuade consumers to spend hundreds of dollars on a game device.
On Thursday, Nintendo also unveiled an updated version of its popular hand-held game player, dubbed Game Boy Advance. A possible shortage of parts means Nintendo won’t ship this $90 device until March 21 in Japan, and some time in July in the U.S.
Product shortages plague companies throughout the video-game industry. Production problems mean that Sony will ship only 1 million units to North America when it begins selling its ballyhooed PlayStation2 here Oct. 26.
The company sold that many machines in the first three days when it debuted the machine in Japan in March.
Rebecca Caruso of Paramus, N.J.-based Toys R Us said some of the chain’s 1,553 stores started taking pre-orders for the Sony units several months ago, anticipating a rush of hungry consumers. But at this point, she said, no Toys R Us store is accepting new PlayStation requests because of the anticipated huge demand.
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Times staff writer Abigail Goldman contributed to this report.
