Nokia bets on game phone

The company will step into unfamiliar territory, playing the underdog as it unveils a cell phone that doubles as a handheld gaming device, a market dominated by Japan's Nintendo.

Nokia on Wednesday will set foot in unfamiliar territory, playing the underdog as it unveils a cell phone that doubles as a handheld gaming device, a market dominated by Japan's Nintendo.

Unhappy with slow growth in the mobile phone market, Nokia will take a stab at the multibillion-dollar handheld video games market. Total game software sales in North America alone grew 27 percent to $4 billion in the 11 months to November, according to market researcher NPD Funworld.

Nokia's debut product, N-Gage, will look similar to Nintendo's Game Boy Advance, the dominant mobile gaming device on the market. But the question remains: Can it become as popular as Game Boy Advance?

As of Sept. 30, Nintendo had shipped 24 million Game Boy Advance units worldwide and had shipped 71 million games since its launch in March 2001.

Like Nintendo, Nokia said it will also become a publisher of games, which will be developed on wafer-sized memory cards. Japan's respected games publisher Sega will develop for N-Gage, bringing its familiar Sonic the Hedgehog character to gaming fans.

Nokia itself has a strong brand among gadget enthusiasts, but there are doubts its cachet will be enough to dethrone Nintendo.

"They'll have to set up a massive publishing unit to get the games to compete with the Game Boy library of games. We're talking a massive investment,'' said Ben Keen, executive director of market researcher ScreenDigest in London.

Anssi Vanjoki, Nokia's executive vice president for mobile phones, acknowledged its uphill battle back in November. "Nintendo is the one owning this market,'' Vanjoki said at the time.

But Vanjoki added that Nokia will bring new elements to the industry, such as wireless gaming, which comes from its experience as the world's largest mobile phone maker.

Story Copyright  © 2003 Reuters Limited.  All rights reserved.

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