Nintendo DS Handheld Sales Hit 10 Million Mark

While much hype has centered on the Xbox 360 gaming console this holiday season, Nintendo grabbed a significant piece of the gaming thunder this year as well, with the company reporting that it has sold some four million of its handheld Nintendo DS devices in the U.S. alone.

Nintendo said it recently passed the 10 million mark for unit sales of the device, which offers portable gaming and other functions, including WiFi connectivity. The four million units sold in the U.S. when combined with sales of the Game Boy Advanced together represent about a 78 percent market share of the mobile gaming market in the U.S., the company said.

Chief hand-held gaming device maker Sony said recently that as of Dec. 1, 2005, it had sold 2.7 million of its PlayStation Portables in the U.S.

Analysts say the milestones come as parts of the gaming industry saw a soft 2005 and a less-than-stellar holiday season, particularly in terms of sales of software game titles that is helping to drive consolidation in the game developer sector.

“At a time when some sectors of the video game industry are softening, Nintendo DS and the Game Boy Advance line remain shining stars,” said Reggie Fils-Aime, Nintendo of America’s executive vice president of sales & marketing.

Getting Connected

Nintendo said the DS has sold five million units in Japan since launching in December of 2004, making it the fastest-selling video game machine in the history of the Japanese video game market.

Nintendo said its WiFi capable games and devices were also proving popular. Seven weeks after launching the service, which enables head-to-head competition on hand-held devices, some 10 million connections have been made, with 550,000 unique visitors from around the world utilizing the service.

Meanwhile, a new analysts’ report said Nintendo saw stronger growth in 2005 than both major rivals — Sony and Microsoft.

Those firms are jockeying for position at a key time, said CFC president David Cole, with the interactive gaming market set to reach US$42 billion a year worldwide by 2010 according to the firm’s forecasts, up from $28 billion this year.

Cole said the launch of Xbox 360 was the beginning of a series of product rollouts that will feature gaming consoles with expanded functionality, making the devices more important to consumers and more valuable to those who make them and the software they use.

Nintendo has its own new product launch scheduled for later in 2006 and is trying to build anticipation for it by saying the product will include a yet-unannounced functionality.

That will help “push the worldwide game industry towards the size of the global recorded music industry by 2008,” he said.

What’s Next?

Much of that will be driven by portable devices as well, Cole added. “The successful companies are the ones that are recognizing the growing diversity among markets, platforms and business models,” he said. “As console systems increasingly connect online, the game industry will become more like a network service business and less like a packaged goods industry.”

Cole said Sony, whose own handheld PlayStation Portable (PSP) has sold well, remains a leader in the space, but will see Microsoft and Nintendo both pick up market share.

Gaming analysts believe the connectivity of new gaming consoles — WiFi in handhelds and broadband connections for in-home game boxes — will open up entire new revenue stream possibilities for gaming companies, with the devices serving as entertainment hubs capable of downloading and playing music, movies and interactive games.

Analysts say game console and software makers are also eager to use that change to tap into new markets, such as women and older gamers. The industry, meanwhile, may be driven toward creating more family-friendly games by a slew of attempts to regulate content.

The games industry won a victory last month when a federal court blocked a California law that would have prohibited sales of certain games to minors just weeks before it was to take effect.

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