Analysts back Nintendo's handheld strategy
Key market analysts and commentators are voicing their approval of Nintendo's handheld platform strategy, according to a report this week which suggests that concerns over the PSP's entry to the market may have been overblown.
Key market analysts and commentators are voicing their approval of Nintendo's handheld platform strategy, according to a report this week which suggests that concerns over the PSP's entry to the market may have been overblown.
Predictions of doom for the Kyoto based giant have been flying around the industry since Sony announced the existence of the PlayStation Portable just under a year ago at E3 2003, and Nintendo's share price plummeted over 15 per cent in the days following the Sony press conference.
However, a cross section of analyst opinion published by Bloomberg this week suggests that as further details of PSP and information about Nintendo's new DS console have emerged, market watchers have been largely reassured about Nintendo's future prospects in the market.
Key to the reversal of opinion about the company's chances is a better understanding of the relative positioning of the Nintendo and Sony product line-ups. "Sony's PSP is more directly targeted at adults," according to Shinko Investment Trust Management Co. senior analyst Takashi Okatani. "That's better understood now."
Okatani believes that investors are more confident now that Sony and Nintendo will not be competing directly for the same market sector with their respective devices - a sentiment which is echoed by NWQ Investment fund manager Peter Boardman, who believes that the PSP will be sold at a far higher price point than the DS.
"Parents would be a lot more willing to pay $99 than $400," he says. "Nintendo's strategy is good. Theirs is the kids' game machine."
Of course, having a device primarily targeted at under-16s doesn't prevent Nintendo from having a strong following among older teenagers and adults - the GBA SP has done extremely well in those markets, despite being aimed largely at the children's market. As such, there is likely to be some cross-over between the PSP and Nintendo GBA/DS markets, but, analysts seem to believe, not enough to define them as directly competing platforms.