Nintendo prepares to launch 3D console

Leo Lewis, Asia Business Correspondent & , : {}

Nintendo is gearing-up for the launch this year of a new version of its DS handheld games machine that will play games in 3D but without the need for special glasses.

The machine will allow Nintendo to relaunch many of its bestselling titles such as Mario, Zelda and Pokmon in 3D but without losing its reputation for selling products at family friendly prices.

Nintendos move into 3D echoes similar gambits by other Japanese consumer electronics companies, which see the emergence of 3D technology as a way to reignite some excitement in home electronics and revive their pricing power in markets where South Korean and Chinese manufacturers have killed margins.

In keeping with its traditional secrecy on product launches, Nintendo offered neither the dates nor specifications of the new 3D DS. It is expected to include motion-sensitive technology to allow players to control games by tilting the machine.

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Some analysts were disappointed that Nintendos move into 3D did not begin with the Wii console many had been hoping that Nintendo was on the verge of announcing a second generation of Wii with more processing power and better definition on large screens.

The companys low-powered machine is starting to look weak compared with Sonys PS3 and Microsofts Xbox 360.

The Nintendo move is believed to be a bid to pre-empt a similar development by Apple and other consumer electronics companies looking at ways of bringing games "out of the screen".

Although it has consistently downplayed the significance of the iPhone, Nintendo is increasingly worried that its 30-year dominance of hand-held games may be under threat.

The new Nintendo device, which will be unveiled in June at the annual E3 video game trade show in Los Angeles, is the fifth generation of the portable DS console a machine that has sold millions but which is now suffering from a sharp decline in software sales.

The historic strength of Nintendo has been to attract casual gamers to its products something it used to do via a constant flow of quirky new games titles and innovative ideas. That side of the market has now been disrupted by the arrival of the iPhone.

The Apple device gives games developers a similar platform to experiment with new ideas and, through iTunes, let them monetise their games more quickly. Unlike the mainstream games market, the iPhone also gives games developers the chance to sell their wares in an environment that is not beholden to complex launch calendars and market cycles.

Games analysts expressed concern that despite the massive global success of the Wii and DS consoles, Nintendo was at risk of making significant strategic errors.

Nintendo had grown up in an era where it could lead the way with both hardware and software, said Atul Goyal, a technology analyst for the brokerage CLSA, but the commoditisation of consumer electronics meant that the Japanese company should be focusing more tightly on its unique skills producing must have games.

"Nintendo could unlock so much more value if it took its games development skills off its own platform, but there is no evidence they are even looking into that, Mr Goyal said.