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Gaming Godzillas Prepare for Battle

By Cynthia L. Webb
washingtonpost.com Staff Writer
Tuesday, September 21, 2004; 10:06 AM

Let the games begin. Not the Olympics again, but the all-out battle between video game giants Sony Corp. and Nintendo Co. Ltd. The two Japanese companies are rolling out new gaming consoles, but Nintendo has beaten Sony to the punch by announcing an earlier launch date for its new hand-held game player.

"Seeking to head off a challenge from video game rival Sony Corp., Nintendo Co. said today that its dual-screen Game Boy player will hit U.S. stores just in time for the crucial holiday shopping season. Nintendo executives in Japan said the DS, its first new hand-held player in three years, will be available in the United States on Nov. 21 with a suggested retail price of $149.99. That will give the Kyoto-based company at least a temporary jump on Sony, whose own hand-held game player has been delayed until at least the first quarter of 2005. Though Nintendo's Game Boy franchise dominates the genre, Sony's popular line of PlayStation game consoles provides it with a wealth of game expertise and a ready-made fan base," the Los Angeles Times reported in its coverage of the duel. Nintendo's $149.99 price tag is "well below what Sony Corp. is expected to set for its rival product," the PlayStation Portable, or PSP, the Wall Street Journal reported.

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Nintendo's U.S. launch is significant. "In a surprise move, Nintendo executives decided to launch their new system in the West first. Japanese-made game systems typically launch in Japan first, then in the United States, and finally in Europe," USA Today said. "For the first time the gaming giant, which dominates the portable games market, is releasing such a device in the U.S. before Japan. The gadget will go on sale on 21 November in the U.S. and 2 December in Japan. Europe will see the device on sale sometime at the start of 2005. Rival Sony is set to release its portable PSP at the end of the year. It is widely expected to go on sale in Japan first, however," BBC News Online reported.
The Los Angeles Times: Nintendo to Launch DS as Sony's Player Is Delayed (Registration required)
The Wall Street Journal: Nintendo to Sell New Game Device Starting Nov. 21 (Subscription required)
USA Today: Nintendo to Launch DS Game System in November
BBC News Online: U.S. Debut for Nintendo DS Gadget

"Putting an aggressive price on it at $149.99 is also going to challenge them," said George Harrison, a senior vice president at Nintendo of America Inc., as quoted by the Journal. Reuters said Sony didn't unveil a price or date for its PSP device, "but also went on the offensive for the Christmas shopping season, saying it would release a smaller version of its PlayStation 2 console at $149 on Nov. 1." The Financial Times noted each company hopes its gaming-device release will "give it a competitive advantage during the upcoming crucial Christmas and year-end selling season."
Reuters via washingtonpost.com: Nintendo, Sony Square Off (Registration required)
The Financial Times: Sony and Nintendo Launch Rival Consoles

The New York Times explained how Nintendo is trying to differentiate its marketing push for its gaming device. Nintendo hopes "that by selling the new device, the Nintendo DS, for adults and older teenage video game players first in the United States, it can avoid a direct confrontation with Sony, which is about to enter the hand-held game market in Japan with a device of its own," the New York Times said, noting that the Tokyo Game Show starts Friday. "Sony and Nintendo are both trying to broaden the market for hand-held game devices that will be able to offer other entertainment features like music, video and wireless Internet connections."
The New York Times: Nintendo's Newest Product Aims for Adults (Registration required)

Sony is not sitting on the bench as Nintendo trots out its DS plans. "Sony's long-awaited PlayStation Portable could prove a formidable opponent," the Los Angeles Times said. "Scheduled to be available in the U.S. in March, the PSP will feature a larger screen than those on the DS. Unlike the DS, which is geared exclusively toward games, analysts expect that the PSP will also function as a digital music and video player. Analysts also predict that it will cost as much as $300 -- about twice [as much as] the DS. Sony has scheduled a news conference in Tokyo today. Speculation is that the company will disclose more information about the PSP. ... Nintendo is hoping that the DS's dual-screen format will keep gamers from straying to Sony. The pair of screens can be used to view games from two angles or to allow two players to go head-to-head via a wireless connection."

More on Sony's PSP, from the FT: "Sony said on Tuesday it had 105 software titles ready for its PSP portable games console, which is expected to appear in shops in major markets in the next several months. Although Sony declined to specify the launch date or its suggested retail price, [Sony Computer Entertainment President Ken Kutaragi] underlined that preparations were nearing completion."

"In terms of the timing of the PSP launch, the question is the software, not the hardware, which is ready," Kutaragi said. And Reuters quoted him as saying at a news conference: "We have seen a strong sales increase after PlayStation was remodeled into [PSone]. We expect the new model to help boost the game market."

The Wall Street Journal gave details about Sony's pint-sized PlayStation 2 and more details on the timing of the release of the much-anticipated PSP. "The new PS2 is about one-fourth the size of the previous version, giving it the dimensions of a hardback book. And unlike its predecessor, it comes with an Ethernet port," the paper said. "At a press conference to unveil the new PS2 ... Kutaragi also showed off the ... PSP, a yet-to-be-released product that represents the company's first crack at hand-held game devices, a field dominated by rival Nintendo Co. Sony ... is touting [the hand-held device] as a multimedia terminal that will be able to play movies and music, as well as large lineup of video games. Mr. Kutaragi said that the device itself is ready but that the company needs 'a little more time' to prepare its lineup of games. Mr. Kutaragi said he expects the product will hit the shelves first in Japan sometime later this year, followed by launches in the rest of the world."
The Wall Street Journal: Sony Unveils Smaller Version of PlayStation 2 Game Console (Subscription required)

The tech gadget blog Gizmodo gives Nintendo's DS an early review. "U.S. gamers can expect to see the DS in stores by November 21st -- a launch date actually a week before Japan, if you can believe it. The DS-to-DS instant messaging software, PictoChat, will come bundled for free, but no proper games, per se. The bad news? Although it is backwards compatible with the Game Boy Advance (not the original Game Boy or Game Boy Color, however), it has no multiplayer link cable port, which means none of the multi-player functions of Game Boy Advance games will work with the DS. It will still be able to play multiplayer DS games, of course, via its in-built wireless connection," according to a posting yesterday, which links to a PortaGame posting on the same topic.

Yahoo, the DJ

Yahoo is hoping the music won't die out. Recall that the company announced plans last week to scoop up online music service Musicmatch Inc. Now there are some details on what Yahoo plans to do with it. The company "will offer 'incentives' for consumers to buy monthly subscriptions to its online music service rather than buy songs individually, Chief Financial Officer Susan Decker said at an investor conference," Bloomberg reported.
Bloomberg via New York Post: Yahoo! Will Push Music

Microsoft Plays DJ Too

Microsoft is giving local radio stations a run for their money. The company's new MSN Music service "is testing a Web-based radio service that mimics nearly 1,000 local radio stations, allowing users to hear a version of their favorite radio station with far fewer interruptions. It's a move analysts say is annoying, but not seriously threatening, the stations," the Associated Press reported. "Because it's a beta and because it's Webcasting, it's not yet considered a tremendously important competitor to radio," Brida Connolly, technology editor of the Radio & Records trade publication told the wire service. "At this stage it's considered more of an irritation."
The Associated Press via washingtonpost.com: Microsoft Mimics Local Radio (Registration required)

Dot-Com Hangover Cure

The online advertising market is showing some hopeful signs, a welcome reprieve from the hangover of the dot-com bust. "Online-advertising revenue was a record $2.37 billion in the second quarter as the industry continued to push past the levels reached during the dot-com boom, according to a trade group. The New York-based Interactive Advertising Bureau said Monday that revenue in the quarter ended June 30 was up 43 percent from a year ago and up 6.2 percent sequentially. First-half revenue was $4.6 billion, up 40 percent from a year ago," the Wall Street Journal reported. USA Today picked up the numbers too and said the surge was "driven largely by the growing popularity of keyword ads tied to search results. ... Search made up 40 percent of the ad revenues in the second quarter of 2004, compared with 29 percent in the year-ago period."

And just to keep online companies and advertisers on their toes, a note of caution to keep the bubbly from flowing. "However, industry analysts say growth in paid search listings is expected to cool over the next five years to about an 11 percent rate by 2009, compared with 65 percent in 2003," Reuters reported.
The Wall Street Journal: Online Ad Revenue Hit Record in Second Quarter (Subscription required)
USA Today: Internet Advertising Revenues Jump 40 Percent
Reuters: Internet Ad Revenue at $2.37 Billion

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