the challenge of defining sufficiently novel

Industry experts who have seen early demonstrations of the 3DS have raved about it. But even Nintendo says it faces unprecedented competition in a smartphone era.

In the year through November, overall sales of software for hand-held devices like the DS and Sony’s PlayStation Portable in the United States fell about 19 percent, according to the market research firm NPD. No wonder, analysts say, given not just the growth in popularity of smartphones, but also the fact that games for phones cost just a few dollars, compared with, say, $30 for a PSP title.

The game makers must persuade consumers to add another gadget to a pile that already includes phones and other game-capable touch-screen devices and tablets. Apple’s iPhone and iPod Touch, in particular, have turned out to be major game platforms.

“Mobile phones and the iPod Touch have killed the hand-held game business,” said Michael Pachter, an industry analyst at Wedbush Securities. He said particular damage had been done at the high end, where parents and children are opting for an iPhone rather than a PSP, and at the low end, where consumers are choosing the iPod Touch over a DS — and then spreading out $100 over 50 games, rather than three or four games for dedicated devices.

But Mr. Pachter argued that with the 3-D graphics of the new Nintendo machine, the company had a chance to attract consumers the way it did with its Wii console, which won over novice gamers with its motion-sensing remote wand.

“The 3DS is sufficiently novel and cool to reverse this trend,” he said, predicting that it would sell out through the end of the year. “It will get people excited, and will make kids and parents forget the mobile phone.”

Not all analysts agree.

via Reviving the Hand-Held Game Business by Adding a New Dimension –

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