Nintendo Co. (7974), the world’s biggest maker of video-game players, began selling its 3DS handheld model to crowds in Tokyo as the company tries to revive profit amid growing competition with Apple Inc. (AAPL) and Sony Corp. (6758)
About 2,000 people gathered outside Yodobashi Camera Co.’s store in Akihabara, Tokyo, to get their hands on the 3DS after it was sold out on pre-order at other electronics retailers, according to deputy shop manager Kazuhiro Kashiwagi. Fans, some of whom began queuing from 10 p.m. yesterday, whiled away the waiting time playing on their Sony PlayStation Portables, iPhones and iPads.
“I already have the previous DS and PSP, but the 3DS graphics are so vivid and deep that I just had to buy it,” said Sachiyo Suma, a 21-year old system engineer, who arrived at the store at 7:40 a.m. “I can’t wait to go home and play.”
Sales in Japan will be the first indicator of whether consumers will flock to 3-D games and help Nintendo duplicate the success of the predecessor DS, which sold 144 million units worldwide. Demand for the 3DS, which goes on sale in the U.S. next month, is key for President Satoru Iwata to take on Apple’s iPhone and Sony’s new PlayStation Portable player and revive profit, forecast by the company to be the lowest in six years.
“I’m expecting them to be sold out and lines around the block,” Jay Defibaugh, an analyst at MF Global FXA Securities in Tokyo, said prior to the release. “It’s going to be a key pillar for Nintendo for the next five years.”
Bic Camera Co., a Tokyo-based operator of electronics store, sold all of its 3DS stock in one day when the handheld became available for pre-order on Jan. 20, said Kohei Ueda, a spokesman, without elaborating. Culture Convenience Club Co., which operates Tsutaya stores, also sold out on pre-order, spokeswoman Mari Oshiro said.
Nintendo’s 3DS, which will allow users to see 3-D images without the need for special glasses, will be sold in the U.S. from March 27 at $250 each, while sales in Europe are scheduled to begin March 25, the Kyoto-based company said last month.
The gamemaker last month reiterated its September plan to ship 4 million 3DS units in its first month to prevent shortages. Iwata earlier this month predicted a “rocket start” to U.S. sales of the player, boosted by the device’s high-definition graphics and titles that showcase its features.
The 3DS in Japan debuted with eight titles, including the company’s own “nintendogs + cats,” Capcom Co.’s Street Fighter IV 3D Edition,” and Konami Corp.’s “Winning Eleven 3D Soccer.” The player will go on sale in the U.S. on March 27 accompanied by 18 titles, Nintendo said earlier this month.
“The success will hinge on whether they can capture core gamer audience and whether they can maintain the friendly disposition of third-party developers,” said Etsuko Tamura, a Tokyo-based analyst at Mizuho Investors. Tamura rates the stock “neutral plus.”
Ryo Ishizuka, chief operating officer at the Japanese unit of the U.S.-based developer of social-networking games RockYou Inc., believes the 3DS can appeal to serious gamers as well as those who prefer to play on the iPhone. Ishizuka, 31, came to Yamada Denki Co.’s Shibuya store in central Tokyo at 4:30 a.m. this morning.
“As a core gamer and a developer I can see a lot of potential for very interesting and innovative games that make use of the 3-D functionality,” Ishizuka said, while browsing comics on his iPad. “This is epoch-making, something that people will later look back on as the beginning of a 3-D boom.”
Nintendo rose 3.5 percent to close at 25,000 yen on the Osaka Securities Exchange yesterday. The shares have gained 4.9 percent this year, after climbing 8.1 percent in 2010.
Net income fell 74 percent from a year earlier to 49.6 billion yen ($607 million) in the nine months ended December, Nintendo said last month. The company slashed the annual forecast for the motion-sensing Wii by 8.6 percent and the handheld DS player by 4.3 percent.
The company said it sold 13.7 million Wii consoles in the period, a 20 percent drop from a year earlier, while sales of DS players fell 33 percent to 15.7 million units. Nintendo forecast full-year sales of the DS at 22.5 million units and 16 million units for the Wii.
Nintendo, which dominated game hardware in consoles with the Wii and in portable players since the Gameboy in 1989, will seek to defend its lead against Sony’s latest PSP, as well as Apple’s iPhone. Other smartphone makers using Google Inc.’s Android software have also attracted consumers with games made by third-party companies.
Sony, the world’s second-largest maker of portable game players, last month said it will offer the new model of the PSP by the year-end holiday season. The device, code-named NGP, will offer access to third-generation wireless networks and have front and rear touch pads, it said.
The Tokyo-based maker of Bravia televisions also said at the time it will offer game content on Android devices.
Sony, whose PlayStation 2 dominated the previous generation of game consoles, also introduced its motion-sensing controller, called Move, for the PS3 to appeal to casual users and narrow Nintendo’s lead. The black controller, resembling Wii’s wand with a colored ball in front, went on sale in the U.S. in September for $50, or $80 with a companion product.
Microsoft Corp. (MSFT) in November introduced its Kinect motion-sensing controller with a free game for $150. The Redmond, Washington-based company last month said it shipped more than 8 million Kinect sensors.
Nintendo deserves “the benefit of the doubt that over the medium to long term they will come through with applications for 3DS that do more than just leverage the 3-D graphic aspect of the machine.,” said Defibaugh, who has a “neutral” rating on the company. “It’s a strong product concept.”
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