Nintendo Goes For Coup De Grace In Video Game Business

Nintendo already has a significant lead in the game console business. Its Wii routinely outsells the Microsoft (MSFT) Xbox 360 and Sony (SNE) PS3. The Japanese company seems to think its advantage is not enough. It is about to introduce another product  to improve its market share to maintain its lead over its two rivals.

The new Nintendo device, the DSi, is portable. That moves the company’s efforts to dominate the industry from the home to the handset although Nintendo has an older device in the portable market. The DSi also opens a new avenue for Nintendo to add to its rapid revenue growth.

According toThe Wall Street Journal, “The DSi also includes new features such as a digital camera and access to a new virtual store, from which users can download applications. It will be available in Europe and the U.S. in early April for $169.”

Part of the appeal of Nintendo gaming devices is that they are easy to use, which gives them a broad appeal outside the hardcore gaming community that favors  the more complex products from Microsoft and Sony.  Aside from having a larger potential customer base, the Nintendo Wii is less expensive than its rivals, in part because the company decided that complex features not only have limited appeal but add substantially to the costs of building an affordable product.

The DSi follows the Nintendo formula of being inexpensive. By adding simple but popular features like a camera and cheap downloadable games, it is likely to improve Nintendo’s advantage in unit sales and make it more difficult for its two rivals to make money.

Douglas A. McIntyre