November 19, 2004 9:22 AM PST

Nintendo aims for older crowd with DS

Nintendo is after a new kind of customer, and this time, the Japanese game giant doesn't have Pokemon to back it up.

The company's new DS, an advanced handheld player meant to expand a market Nintendo already dominates with its Game Boy line, is set to go on sale Sunday in the United States and Canada.

With a price tag of $149, advanced features such as wireless text messaging and a lineup of games that only includes a few entries by Nintendo stalwarts such as Mario, Nintendo is counting on selling the DS to an audience older and pickier than the preteen market that dominates Game Boy sales.

That means ditching the Game Boy name. The new device will be sold simply as the DS (which stands for "dual screen"), as part of a move to establish a new identity, said Schelley Olhava, an analyst at research firm IDC.

"They're working very diligently to change their image from kiddie to hip and cool," Olhava said. "The Game Boy name really signifies warm and cuddly, and that's not the association they want for this product."

To accomplish its goal, Nintendo is backing the product with a $40 million marketing campaign dominated by efforts to get teen and older consumers to take a test drive.

"We're putting a lot of demonstration units out there," said George Harrison, senior vice president of marketing at Nintendo of America. "One of the things we want to do is attract people who aren't necessarily hard-core gamers. We think that takes a little more encouragement."

Technological advances in the DS include a pair of high-resolution screens capable of showing 3D images. The lower screen is touch-sensitive, allowing for a new style of game control. The DS also has built-in wireless networking for multiplayer games and text messaging via the new "PictoChat" application.

The DS also introduces some advances on the business side. Nintendo typically has dominated the content for its devices, thanks to popular franchises such as Mario and Pokemon. But the launch roster for DS is heavy with games from third-party publishers, including leading game maker Electronic Arts, which has generally ignored the Game Boy.

"I think they (Nintendo) have really used this as an opportunity to rework the royalty arrangements and look in general at how they deal with outside publishers," Olhava said. "Nintendo realizes they can't do this one on their own. The 18-year-old gamer is just not interested in playing Pokemon."

The same third-party publishers will be hedging their bets, however, when Sony releases its PlayStation Portable handheld game player in Japan next month. Harrison said Nintendo--which recently increased its forecast for DS sales--isn't worried about the competition, noting that the PSP won't make it to North America until early next year.

"We've got a few months and a key holiday selling season to build a lead," he said. "I think we'll have built up a lot of momentum before they ever get to market."

 

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