June 16, 2010 / 12:24 AM / in 7 years

Game on: Nintendo, Sony, Microsoft wage war

LOS ANGELES (Reuters) - Electronics hardware makers on Tuesday showed off snazzy new devices enabling motion-sensing play and 3D effects, intensifying a battle to introduce video-gaming to a new generation of casual users.

Hot on the heels of Microsoft’s full-body motion-sensing Kinect, Japan’s Nintendo Co Ltd on Tuesday took the wraps off a new version of its DS handheld device that can play games and show movies in 3D without glasses.

And Sony Corp introduced the “Move” -- which like Nintendo’s popular Wii employs a wand-like controller to double as everything from a tennis racket to a baseball bat in games -- and promised up to a score of 3D titles soon for its PlayStation 3 console.

The launches and demonstrations from the triumvirate of gaming hardware makers at this week’s E3 expo in Los Angeles -- the $60 billion industry’s most important annual showcase -- set the stage for a pitched battle to bring players beyond the hard-core fanbase into the fold.

Analysts said Microsoft made the biggest splash with a seemingly revolutionary platform that employs no controller, and a clear mandate to target casual players. And Nintendo’s move to add a third dimension to its market-leading DS mobile handled device will shore up its market position.

The triumvirate that rules the market for gaming devices is stepping up their battle just as the industry is beginning to recover from a two-year slump. Analysts say laggard Sony, the erstwhile consumer electronics leader that has seen Nintendo surge ahead with the well-received Wii, has a potential winner in Move but that the jury was still out.

Sony’s Move appeared to mimic a gaming system that Nintendo pioneered with the controller-operated Wii a couple years ago, but Sony argued the precision of its technology -- which captures every twist and contortion of arm actions -- and the ability to employ combinations of buttons will continue to please hard-core players.

“It may well be more versatile than Kinect, but the challenge there is demoing it. Sony does have the biggest challenge ahead of them -- they have the furthest to go,” said M2 Research analyst Billy Pidgeon.

“It’s still possible that Sony could knock them off, but they didn’t make the case for doing that this year.”

PIVOTAL POINT

U.S. industry sales -- hardware, software and accessories -- are down more than 10 percent at $4.7 billion this year through April, according to research firm NPD Group.

But new technology is expected to drive spending on games. PriceWaterhouseCoopers estimates the overall games market -- excluding hardware -- climbing 6.5 percent annually on average to $20.7 billion in 2014, from $15.1 billion in 2009.

“The success or failure of these technologies will determine the health and growth of our industry over the next three years,” said EEDAR analyst Jesse Divnich.

On Tuesday, the creator of Super Mario games and the Wii offered a peek at its 3DS. The device comes with two screens -- one a touch screen -- and three built-in cameras, enabling the machine to snap digital photos in 3D.

Nintendo, which has seen growth in sales of its industry-leading Wii slow as rivals slash prices, did not say when sales begin or give a retail price, except that it will hit store shelves sometime before March 2011.

Growing competition from Apple Inc’s iPhone, smartphones and social networks is also starting to pose a threat to Nintendo’s DS portable player, analysts said.

Electronics makers have high hopes that growing interest in 3D -- sparked in part by the sci-fi blockbuster “Avatar” -- will power a new era of growth for an industry still recovering from the 2008-2009 downturn.

“It looked good and seems promising. Its keeping Nintendo on their game and their game is really good. They own the handheld market. I think this isn’t going to concede this to anyone,” said M2 Research analyst Billy Pidgeon.

Executives are pondering newfangled options for the 3DS.

“We have not decided on a specific business model regarding 3D movies running on 3DS. However, for Nintendo and movie studios it can provide a unique business opportunity,” President Satoru Iwata said through a translator.

“3DS is expecting to sell a lot in a relatively short time period after the launch, and it will be a unique machine.”

The 3DS comes after Nintendo forecast a second straight year of smaller profits, as sales of Wiis slow.

It rode strong demand for the Wii and DS to three straight years of record profits through March 2009, but growth slowed last year after Sony and Microsoft cut console prices.

Nintendo of America President Reggie Fils-Aime sought to refute the perception that sales were softening, and that the Wii has lost its luster as rival platforms gain momentum.

Calling these notions “false perceptions,” Fils-Aime said more software was sold for the Wii in 43 months on the market than on any platform over the same time frame.

WE‘RE NOT ALONE

Nintendo is not alone in taking the wraps off a hot new gizmo. On Monday, Microsoft said it will begin selling its “Kinect” motion-sensing game system on November 4.

Also on Tuesday, Sony announced that its Move motion-sensing platform -- which will compete with the Wii and Kinect -- will begin selling on September 15 in Europe, followed a few days later in the United States.

And the consumer electronics giant is also making a huge bet on 3D gaming, as it is on making 3D-capable televisions.

The company argues it is alone in offering an end-to-end 3D experience, from its televisions to specially designed content via its entertainment division.

The company will have more than 20 3D titles available for the PlayStation 3, which has a base of some 35 million users, by March of 2011.

Writing by Edwin Chan; Editing by Sofina Mirza-Reid

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