The short history of Nokia's
N-Gage is Nokia's attempt to bust into the handheld gaming market currently dominated by Nintendo: It hopes to sell six to nine million units by the end of next year.
And Nokia is upping the ante by packing in more than just gaming capabilities. Its device is also a phone, web browser, and MP3 player. (Is it ironic that Nokia is complaining about piracy even as its device plays the MP3 format perhaps best associated with stolen data? You decide.)
We took a broader look at the handheld biz, including the approaches taken by Sony
Despite Nokia's insistence that it will pursue the perpetrators with gusto, it's hard to see today's news as anything but a bad sign for investors. The company stands to lose license revenue if games are widely distributed -- not hard to imagine given that hardcore gamers will likely be the early adopters of N-Gage, despite the company's mass-marketing efforts. Moreover, developers working with the company can't be pleased.
Cynics in the media and in discussion forums are suggesting that Nokia was intentionally lax about copy protection in its first round of N-Gage games, expecting them to be distributed in hopes of boosting device sales. This sounds far-fetched: Such tactics would seem to be murder for a company attempting to forge strong relationships with game developers.
Don't imagine critics don't already harbor doubts about Nokia's ability to succeed in the game business. Some have said the system is overpriced; others cry too much convergence too soon, or complain that the games don't represent value for money.
Let's look at the big picture. Nokia has the financial wherewithal to support N-Gage. Today's news is just one more growing pain.