Nintendo (NASDAQ:NTDOY) needs to shake things up. It needs to get the attention of hard-core gamers. It needs a...
...revolution.
As such, the company has christened the new game console it is working on with the temporary moniker Revolution. Quite evocative, to be sure. Question is, can the company produce something that will live up to such an ambitious sobriquet?
There's no question that Nintendo owns the handheld market with its Gameboy Advance franchise. But the console wars haven't been kind to the Gamecube system. Sony's (NYSE:SNE) Playstation 2 machine owns the market, and Microsoft's (NASDAQ:MSFT) Xbox has been making progress, especially with its recent price cut; of course, Sony wasn't going to sit around and let Bill Gates take away too much share, so the powers that be over at the electronics giant initiated their own consumer-friendly devaluation. These moves did nothing to help the little 'cube, and Nintendo is apparently not willing to get aggressive at the moment by entering the price wars.
But, it is willing to increase research and development funding by 27% to ensure that the best possible product eventually comes to market in the near future (all of that increase won't necessarily go to just the Revolution project, but I'm willing to bet that a big chunk of it will). "Near future" hasn't been defined yet, although it's been stated that Nintendo wants to have a demo of the technology at next year's E3 gathering.
A Nintendo official implied that Revolution would be a quantum leap from the Gamecube system and would be a radical improvement over the current video-game experience, so much so that it takes game play in an entirely new direction. Kind of sounds like the company's intentions with its new handheld unit.
I'm sure the designers over at Electronic Arts (NASDAQ:ERTS) and Activision (NASDAQ:ATVI), among other publishers/developers, are excited at the prospect of a fresh market. Then again, this is Nintendo we're talking about, and while it used to be the premier brand name in video games, the company just isn't as cool anymore (hey, I own a Gamecube, so don't kill the messenger). Even concerns such as Disney (NYSE:DIS) and Viacom (NYSE:VIA) probably can't wait till their respective characters exploit a brand-new platform. I'm sure Viacom in particular is chomping at the bit for further 3-D adventures of SpongeBob; that crazy yellow square of marine biomass did wonders for THQ (NASDAQ:THQI) and its prospects.
One thing Nintendo must accomplish with Revolution is a solid online strategy -- that's where the future growth is, in my opinion (Jeff Hwang discussed a recent deal concerning online gaming).
It's still awhile away, but the new console cycle will soon be with us.
Video-game developers Activision and Electronic Arts are both among David Gardner's Motley Fool Stock Advisor recommendations. To see what other companies David has highlighted, sign up for six months, risk free.
Fool contributor Steven Mallas owns none of the companies mentioned.
