Game On: Nintendo, Sony, Microsoft Wage War

By Gabriel Madway and Franklin Paul

June 16, 2010 1:16 AM EDT

Electronics hardware makers on Tuesday showed off snazzy new devices enabling motion-sensing play and 3D effects, intensifying a battle to introduce video-gaming to a new generation of casual users.

Hot on the heels of Microsoft's full-body motion-sensing Kinect, Japan's Nintendo Co Ltd on Tuesday took the wraps off a new version of its DS handheld device that can play games and show movies in 3D without glasses.

And Sony Corp introduced the "Move" -- which like Nintendo's popular Wii employs a wand-like controller to double as everything from a tennis racket to a baseball bat in games -- and promised up to a score of 3D titles soon for its PlayStation 3 console.

The launches and demonstrations from the triumvirate of gaming hardware makers at this week's E3 expo in Los Angeles -- the $60 billion industry's most important annual showcase -- set the stage for a pitched battle to bring players beyond the hard-core fanbase into the fold.

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Analysts said Microsoft made the biggest splash with a seemingly revolutionary platform that employs no controller, and a clear mandate to target casual players. And Nintendo's move to add a third dimension to its market-leading DS mobile handled device will shore up its market position.

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The triumvirate that rules the market for gaming devices is stepping up their battle just as the industry is beginning to recover from a two-year slump. Analysts say laggard Sony, the erstwhile consumer electronics leader that has seen Nintendo surge ahead with the well-received Wii, has a potential winner in Move but that the jury was still out.

Sony's Move appeared to mimic a gaming system that Nintendo pioneered with the controller-operated Wii a couple years ago, but Sony argued the precision of its technology -- which captures every twist and contortion of arm actions -- and the ability to employ combinations of buttons will continue to please hard-core players.

"It may well be more versatile than Kinect, but the challenge there is demoing it. Sony does have the biggest challenge ahead of them -- they have the furthest to go," said M2 Research analyst Billy Pidgeon.

"It's still possible that Sony could knock them off, but they didn't make the case for doing that this year."

PIVOTAL POINT

U.S. industry sales -- hardware, software and accessories -- are down more than 10 percent at $4.7 billion this year through April, according to research firm NPD Group.

But new technology is expected to drive spending on games. PriceWaterhouseCoopers estimates the overall games market -- excluding hardware -- climbing 6.5 percent annually on average to $20.7 billion in 2014, from $15.1 billion in 2009.

"The success or failure of these technologies will determine the health and growth of our industry over the next three years," said EEDAR analyst Jesse Divnich.

On Tuesday, the creator of Super Mario games and the Wii offered a peek at its 3DS. The device comes with two screens -- one a touch screen -- and three built-in cameras, enabling the machine to snap digital photos in 3D.

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