In 2013, NVIDIA (NASDAQ:NVDA) launched the Shield portable gaming console, a gamepad with a screen attached running Android and powered by the company's Tegra 4 processor. It was a niche device, and while features were added over time that broadened its appeal, it was never meant to be a mainstream success.

NVIDIA has now announced a new member of the Shield family, the Shield Tablet, with the device set to launch for $299 on July 29. With the tablet market very quickly becoming commoditized, NVIDIA is trying to carve out a section for itself, with the goal of creating an Android gaming market where the powerful graphics capabilities of its Tegra processors provide the company with a competitive advantage. The Shield Tablet won't be outselling Apple's (NASDAQ:AAPL) iPad anytime soon, but it could prove to be a compelling product for serious gamers.

Tablet Controller Pair

Source: NVIDIA

What makes the Shield Tablet unique?
The Shield Tablet supports all Android games, but it also supports games built specifically for NVIDIA's Tegra. Two examples are Half Life 2 and Portal, both originally PC games from Valve that, with the help of NVIDIA, were ported over to Tegra and are available only on Shield devices. The Tegra K1 supports all of the major technologies supported by desktop graphics cards, such as OpenGL 4.4, unlike most mobile devices which support the embedded version of OpenGL, and this makes porting PC games to the Shield simpler.

Along with Android games, the Shield Tablet supports streaming PC games from a PC with a supported NVIDIA graphics card. This can be done both on the same network as the PC, or over the Internet, and while the Shield Portable also supports this function, its small screen was a limitation. The Shield Tablet can also be hooked up to a TV, allowing it to act as a game console to either play Android games or stream PC games.

Will it sell?
At $300, the Shield Tablet is certainly not the cheapest small tablet, although it is less expensive than Apple's Retina iPad Mini. Amazon's Kindle Fire HDX, which has the same screen resolution as the Shield Tablet, is $229, for example. As a general purpose tablet, the Shield Tablet is competitive, but nothing special.

The Shield Tablet is really only an attractive device for those who own a gaming PC with an NVIDIA graphics card, since the additional streaming functions depend on it. For serious gamers, the Shield Tablet could also serve as a general purpose tablet, and this is the market that NVIDIA is most likely going after. While still a niche device like the Shield Portable, the Shield Tablet has much broader appeal due to its form factor.

Apple gets serious about gaming
Apple is the one company that could throw a wrench in NVIDIA's plans to elevate Android gaming. The next version of iOS will come with Metal, Apple's graphics API for mobile devices, which promises to minimize overhead for graphics-intensive applications. Metal is now integrated into the Unreal 4 game engine, and a demo shown at Apple's Worldwide Developer Conference earlier this year demonstrated the power of the API.

The benefit that Apple has is the enormous number of iOS devices out in the wild. There are more Android devices, of course, but the specs vary wildly, and developing games that work well across the entire spectrum is difficult. NVIDIA has tried to solve this problem with Tegra, but the company is in a chicken-and-egg situation. It needs millions of Tegra devices in people's hands for developers to take notice, but it needs high-quality Tegra games for the devices to sell. The PC streaming features will help, but Apple is clearly aiming to make iOS the premier mobile gaming platform.

The bottom line
NVIDIA's Shield Tablet is more appealing than the portable Shield device, but it's still really only attractive to serious PC gamers. If it sells well, it would strengthen the ecosystem around NVIDIA's graphics cards and possibly spur other companies to make Tegra-based tablets of their own. If it doesn't, NVIDIA may have to go back to the drawing board.

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Timothy Green owns shares of Nvidia. The Motley Fool recommends Apple and Nvidia. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.