New Gameboy?

NEW YORK (CNN/Money) – While Nintendo's next generation console gaming system likely won't hit living rooms until 2006, that doesn't mean the company won't introduce new hardware this year. A new analyst report suggests the company is planning to ship the next version of the Game Boy portable gaming system by the end of 2005.

If so, that would be the third new handheld gaming system in as many years for Nintendo, whose Nintendo DS was one of the hottest items of the 2004 holiday season and Game Boy Advance SP was one of the must-have gifts of 2003. The new Game Boy would face stiff competition, though, from Sony's PSP – which will hit U.S. stores in March.

"We believe it is likely that the next version of the Game Boy Advance SP will ship as early as this holiday, ahead of most expectations of calendar year 2006," wrote P.J. McNealy of American Technology Research.

The new system, he predicts, will launch at a $99 price point, with prices on the Game Boy Advance falling to $49. Nintendo DS prices, he wrote, will likely remain unchanged.

Nintendo downplayed the report, but stopped short of denying it.

"There is always speculation on what the next Game Boy will be, however, at this time there are no announcements about a new Game Boy Advance SP product," said Beth Llewelyn, senior director of public relations for Nintendo of America.

Official confirmation of the new Game Boy could come as early as March 10, when Nintendo president Satoru Iwata is scheduled to give a keynote speech entitled "The Heart of a Gamer" at the upcoming Game Developer's Conference in San Francisco.

It's unclear at this point what sort of advances might be found in a new Game Boy. While this may be a graphical leap forward like many next generation consoles, it could just as easily be an incremental step, slightly enhancing the company's current offering.

Releasing a new Game Boy on the heels of the Nintendo DS, which features two screens and a touch pad, might seem a bit odd, but Nintendo has been quite vocal in saying the two systems are built for different audiences. The Game Boy has traditionally been aimed at children, while Nintendo hopes to reach an older audience with the DS.

McNealy said the numbers seem to be backing Nintendo up.

"The Nintendo DS has, by and large, been additive to Nintendo software revenue and units sales and not cannibalistic," he wrote. "Even with the DS launch in November, GBA software revenue and unit sales were up double-digits in December and January."

That's not to say it has all been smooth sailing for the DS. While the system enjoyed tremendous success during the holiday period, software sales have been rather disappointing. So far in 2005, new title releases have been minimal, which has stymied the system's momentum.

And the imminent launch of the PSP will only make the fight harder. Sony's system has been getting rave reviews from overseas users – and demand will almost certainly exceed supply when the PSP launches in the U.S.

But a new hardware launch would help keep Nintendo top of mind with consumers during the holiday season. Sony will be heavily promoting the PSP as December draws near – and Microsoft is expected to launch the next version of its Xbox gaming system this fall. Without a new device, Nintendo could easily be overshadowed.

There's also the real threat of piracy with the current generation of Game Boys. Although piracy of GBA games has not been a major problem in North America, the company has seen a dramatic rise of digital theft in the Asia-Pacific region. The cartridges used for GBA cards are fairly easy for hackers to crack and the games are often posted online. The DS, which uses flash memory cards, has not had the same problems, writes McNealy.

A new Game Boy could give a boost to some game publishers. While industry leader Electronic Arts (Research) and Take Two Interactive Software (Research) do not have big presences on Nintendo's handhelds, THQ (Research) makes a large number of games for the system. And Activision (Research) has shown an increased interest in them recently.

"We believe that a new GBA SP could mean between $10 million to $20 million of additional revenue for both Activision and THQ in FY06, and an additional $0.02 to $0.04 in earnings," wrote McNealy.

The question is, though: Will Nintendo's audience be willing to shell out another hundred bucks (or more) for the third year in a row? Or will they invest their gaming dollars elsewhere?

Morris is Director of Content Development for CNN/Money. Click here to send him an email.  

XBOX 2

NEW YORK (CNN/Money) – Dear Bill,

Just a few months to go, Big Guy. You may have come to the party a year late this go 'round, but you'll be kicking off the next generation of game machines before the fall is over.

Lots of folks can't wait to see what you have to offer. I'll admit, I'm one of them.

The Xbox has put out some good games, blazed new paths in online connectivity and will be going out with a bang. But to catch up with the lead Sony has in this industry, you're going to need to pull a few rabbits out of your hat . . . er, excuse me . . . your sweater.

I know you've got a few planned, but if you've got a couple of moments, I'd like to add my own suggestions.

Be backward compatible: Look, I know replicating technological capabilities and performance is tricky when you've switched hardware vendors. Gamers don't care, though. They just want it done.

If the next Xbox launches and people aren't able to play "Halo 2" along with their new titles, you're going to have a riot on your hands. Given how heavily you marketed that title, you'll deserve that riot.

Is it necessary to be able to play every Xbox game on the new system? It'd be nice, but the honest answer is no. It's not like I'm going to pick up an outdated "NFL Fever" or "Fight Club" anytime soon.

Yes, yes, I know you're working on this already. Word is it's not going super smooth, but you're making progress. That's fine. Don't give up.

Got Live? Have a demo!: Video chat's cool, I'll grant you. But I'm not sure how useful it is to the average Xbox owner. It certainly doesn't help gameplay.

You've helped set the standard for what the online console space should do in terms of online gaming – and you're promising to expand on that. But you've completely missed the boat on a great opportunity to expand both first- and third-party software sales: Add free game demo distribution to Xbox Live.

The PC gaming industry (ok, just this once, I'll go with the term you prefer -- the Games for Windows industry, happy now?) learned long ago that demos boost sales. The slew of magazine cover discs proves it's possible to make demos. So why aren't you making those freely and readily available to your loyalist customers?

You'll have to rework the Xbox Live dashboard, sure. And it will cost you some bandwidth. But you'll more than make up those expenses with royalty payments. Your publishing partners would certainly appreciate the free marketing.

Use Rare wisely: Buying Rare, the developer who created some of the biggest hits on the Nintendo 64, was a wise move. Unfortunately, the developer's first title, "Grabbed by the Ghoulies," was weak.

Rare's "Perfect Dark Zero" will, in all likelihood, be your flagship launch title.

Do not let this title suck. I beg you.

"Perfect Dark" has a rabid fan base, and it's not likely to be forgiving. The anime style Joanna Dark you hinted at in earlier presentations didn't win many fans. That was a head fake to throw competitors off, right?

Even if "Perfect Dark Zero" is a smash, try to give Rare room to launch new franchises. They're a talented team of developers and they take a long time to make their games. When they do things right, they can make magic.

Lead by example: One of the most interesting things J Allard, your corporate vice president, said at the Game Developer Conference last week was you planned to offer the ability for publishers to offer episodic games.

It's a wonderful idea, but if your own studios don't get out in front of this, no other publisher will either. Allow your AAA teams, like Bungie (makers of "Halo"), FASA ("Crimson Skies") and Rare, to try something different. Encourage partners to do the same. At the same time, recruit young developers, who haven't made a name for themselves, to create something outside the box.

Who knows, you might find your next round of superstars this way.

Follow through: As any company gets close to a launch window, the hyperbole ratchets up to an outlandish degree. No problem. We've all come to accept it. But how about, just for giggles, following up on all the promises Microsoft (Research) makes?

So far, you've spoken of PC and Xbox gamers sharing the same gaming world and publicly envisioned a free marketplace, where players can sell their in-game creations for real-world cash. More promises will surely come in May, when you formally reveal the system.

Yeah, I know the public has a short memory. But once, just once, it'd be nice to see a company think before it speaks.

If you're not 100 percent sure you'll be able to do something with your next console, just keep your mouth shut.

I'd ask you to change your mind on naming this thing "Xbox 360," too. But I hear it's a bit late to do that.

Best,

Chris

By Tony Smith

Published Tuesday 10th February 2004 14:33 GMT

Nintendo today denied Japanese reports that it has delayed the launch of the GameCube's successor and that its 2005-6 release target is the one it has always had in mind.

"Other companies aren't expected to come out with next-generation consoles until late 2005 or 2006," Nintendo spokesman Yasuhiro Minagawa told Reuters. "Our machine will be ready at the same time as the other new consoles."

This morning, Japanese business newspaper the Nihon Keizai Shimbun said Nintendo would delay the launch of a next-generation game machine. The report did not say when Nintendo had originally planned to introduce GameCube's successor.

The report also claims that Nintendo is planning a new peripheral device for the GameCube that will improve the console sound and graphics.

Nintendo has already signed IBM to produce the processor that will power its next-generation console. IBM already manufactures the PowerPC chip, codenamed 'Gekko', at the heart of the GameCube. ATI will provide the console's graphics.

Ironically, both IBM and ATI have been contracted to provide processor and graphics technologies, respectively, for Microsoft's second-generation Xbox. That makes us wonder if GameCube 2 might well be a rebranded Xbox 2, and certainly the Nintendo spokeswoman's claim that the company's "machine will be ready at the same time as the other new consoles" doesn't contradict that idea. ®