Nokia vs. Nintendo could be a bad call, analysts say

By Ville Heiskanen
Bloomberg News Service

Nokia's new N-Gage hand-held video game player was displayed at a product launch in London. Nokia, the No. 1 mobile-phone maker, has lined up established developers to create games for its player. Bloomberg News Service

The Finnish company said in November that this year it will start selling a hand-held game player that doubles as a phone.

Last week Nokia said it had lined up Eidos Plc, Activision Inc. and THQ Inc. to develop games for the N-Gage game player, which also doubles as a mobile phone. Sega Corp. and Taito Corp. have said they will cooperate with Nokia.

The games by established developers will help Nokia in its bid to challenge Nintendo, whose Game Boy Advance dominates the hand-held player market, analysts have said.

Nokia, which controls more than a third of the mobile-phone market, is expanding into games as demand for mobile phones and wireless networks sputters.

However, Nokia may find its image as a game company isn't strong enough to take on Nintendo, analysts said.

Nokia's sales have slowed since 2000 as mobile-phone markets in Europe and the United States became saturated and debt-laden phone companies pared spending, delaying new services that were expected to spark demand. Nokia last month said its first-quarter sales and profit may decline from the year-earlier period.

Nokia's challenge is to steal market share from Nintendo. The Kyoto, Japan-based company has sold more than 110 million hand-held players worldwide since it introduced the Game Boy in 1989.

Nintendo is the world's No. 2 maker of video consoles, sandwiched between market leader Sony Corp. and Microsoft Corp.

To make it even more difficult for Nokia, Nintendo said last month it will bring out a new version of its player with a brighter screen to maintain its market dominance.

The Game Boy Advance SP will debut in the United States, Europe and Australia next month. Nintendo plans to sell 2 million players in the first month.

Nokia declined to disclose how many N-Gages it expects to sell this year or next.