May 14, 2004 4:51 AM PDT

Game specialists make moves for handheld niches

LOS ANGELES--While Sony and Nintendo gear up for a battle over the mobile-gaming market, other companies are preparing for smaller skirmishes.

The game giants have been the big talk of the Electronic Entertainment Expo (E3), which took place here this week, with their respective plans for high-powered devices that are expected to expand the portable-gaming market from the kid focus of Nintendo's Game Boy Advance.

But there are a lot more cell phones out there than specialist gaming devices, says Mitch Lasky, CEO of Jamdat Mobile, one of the leading publishers of games for mobile phones. And those phones are becoming more and more capable as gaming devices, Lasky said.

"The kind of changes Sony and Nintendo are talking about with these new devices, we go through those revolutions every nine months," Lasky said. "The phones get more powerful all the time, and we have to build completely new tools to take advantage of all this processing power we didn't have before."

Lasky doesn't expect the new Sony and Nintendo devices to cut into the cell phone gaming market, because mobile phones have become such a must-have for modern folks: "We still think there's a large segment of people who don't want to carry multiple devices, and if you're only going to carry one thing, the cell phone is going to win."

Sony's PSP does up the ante for what consumers will expect from mobile games, however.

"Regardless of the PSP, there's always pressure on us to make the games look better and play better, but this will push the bar a little higher," Lasky said.

And cell phone developers can't count entirely on hardware to make their jobs easier. While processors for mobile phones have increased greatly in power over the past few years, displays haven't followed the bigger-is-better route of dedicated gaming handhelds. Instead, cell phone developers have had to make the most of increasingly dense screen resolutions.

"Nobody's going to carry around something that looks like a World War II walkie-talkie just to have a bigger screen, so we make the most we can of having more detail to work with," Lasky said.

Eye of the Tiger
Somewhere between the mobile phone and handheld gaming markets is Tiger Telematics, a British Global Positioning System (GPS) specialist, which plans to enter the consumer market in a few months with a device that combines games, multimedia playback, GPS functionality, text messaging and a digital camera.

The company's Gizmondo is powered by a 400MHz processor, runs Microsoft's Windows CE operating system and Windows Media Player 9, and uses Secure Digital flash memory cards for storage. It's set to go on sale in the United Kingdom in October and in North America late this year, priced around $350.

By combining a broad range of functions, the device should appeal as a family purchase, said Michael Carrender, Tiger's CEO.

Carrender sees a niche for Gizmondo developing as handheld habits shift. Cell phones are increasingly taking on the functions of PDAs (personal digital assistants) such as Palm devices, he said, and consumers will be looking at other options for a secondary mobile device.

"I think the PDA makers are the ones who really have to worry over the next couple of years," Carrender said.

And by keeping costs down and thinking strategically about partnerships, he said, the Gizmondo only needs to take a small chunk of that emerging market to succeed.

"Obviously, we'll be competing somewhat with Sony and the PSP, but we'll be out on the market months before they are, and we just need a little slice of what they've got to be successful," Carrender said.

 

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