Trust me, you don't want to see desperate parents shopping over the holidays. I was at Circuit City (NYSE:CC) last week and saw a mother pleading with a sales clerk for a Nintendo DS portable video game system. He checked another store for her but we all know how that formality goes. She was out of luck. Her offer to buy the floor model was rebuffed.
I was lucky. Two weeks ago, when I read that the initial shipment sold out in a matter of days and deliveries would be limited until early next year, I turned to the keeper of all trinkets -- eBay (NASDAQ:EBAY). Seeing auctions for the $150 system close in the $180 to $190 range, I waited until the wee hours one night and managed to snag one for $162.50 -- and $10 shipping -- from a seller with a pristine feedback rating.
It wasn't much more than what I would have spent locally when you tacked on my state's sales tax and, more importantly, the first and most important item on my 11-year-old son's Christmas list could be checked off once the item arrived a week later.
Whether frantic parents stateside are ultimately placated with a last-minute shipment of 400,000 units later this month, one has to wonder what this will mean for Nintendo (NASDAQ:NTDOY). While holiday shortages that prop up the prestige of any given year's hot toy may or may not be intentional, the timing of Nintendo's supply failure couldn't be worse. In three months Sony (NYSE:SNE) will be rolling out its PlayStation Portable -- or PSP -- and if it manages to stomp Nintendo on the handheld side the way its flagship PlayStation and PlayStation 2 have trounced it domestically on the console side, things could get ugly.
Then again, there are plenty of reasons why that is not likely to happen. Sony's success in console sales stems from its wide library of software titles and the fact that its PS2 was compatible with games for the original model. It's a lot easier to break into a home when buyers don't have to start their game collection from scratch. On the portable side, the roles are reversed. Nintendo Game Boy Advance games will play on the DS while Sony is the one starting from scratch.
While the PSP has some nifty features, that's not the exclusive recipe for success. If you don't believe me, let me know how many people you know who own a Nokia (NYSE:NOK) N-Gage handset.
Besides, Nintendo let Sony -- and recently Microsoft (NASDAQ:MSFT) -- lap it in this country's console market. It's going to fight tooth and nail to keep the pole position when it comes to handheld systems.
That's why Nintendo needs its DS installed base to be as large as possible over the next three months. Given the fickle gaming world, it's the one game that Nintendo simply can't afford to lose.
What do you think of the DS? Are you holding out hope for the PSP? Why have portable gaming systems fared so well when the actual consoles offer such a richer realm of graphics? All this and more -- in the Video & PC Games discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz hopes that he never grows up if that means putting away the video games. He does not own shares in any of the companies mentioned in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
