New Nintendo Console Gets Key Boost
The world’s biggest independent game publisher, Electronic Arts Inc., will develop games for Nintendo Co.’s next-generation video game console--a development considered critical to the system’s potential success.
The Gamecube console is scheduled to arrive in stores in November, when it will compete head to head with Sony Corp.’s PlayStation 2 and Microsoft Corp.’s Xbox machines for a piece of the $6-billion U.S. video game market.
Although this new slate of hardware features some of the most advanced technology available, console makers know that consumers care only about games.
The industry maxim that games sell consoles means that companies such as EA have become key to the success of any hardware launch.
That is true even for Nintendo, a $5-billion video game juggernaut that has risen to power on the strength of its Mario and Pokemon franchises.
Although Nintendo relies less on outside game developers than its rivals, the Japanese company has had less success making the types of sports games that sell well in the United States and Europe.
EA, on the other hand, is one of the biggest developers of sports games. Its “Madden NFL” football franchise has sold close to 21 million copies since its debut in 1989.
Close to 40% of the 3 million consumers in North America who purchased PlayStation 2 consoles also bought “Madden NFL 2001.”
“For EA, it’s not a surprise that they put their best titles into a platform that’s positioned to be a slam-dunk,” said Larry Marcus, partner at WaldenVC in San Francisco, and a longtime games analyst.
“As far as Nintendo is concerned, EA’s marquee sports titles will help Nintendo appeal to a slightly older demographic and sell more units.”
Until now, EA, based in Redwood City, Calif., has not officially said whether it will make games for the Gamecube.
Although EA has made games for most hardware platforms, including Nintendo’s N64 console, it historically focused most of its resources on developing games for Sony’s PlayStation console and the PC.
The partnership between EA and Sony has been a mutually beneficial one. As Sony became the dominant console player, EA became one of its most prolific game developers.
The relationship, however, took a hit last year when Sony failed to deliver as many PlayStation 2 units as it had initially promised for launch in October.
The shortage of consoles dampened software sales, contributing to EA’s disappointing earnings during the critical holiday season, when about 80% of sales occur for the industry.
Since then, EA has announced it will make 10 games for Microsoft’s upcoming Xbox, indicating that although it will continue to develop for the PlayStation platform, it will also hedge its bets by selling software for other consoles, including the Gamecube.
