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ELECTRONIC ENTERTAINMENT EXPO

The Battle of the Boxes Begins

Before the curtain rises on E3, game console makers campaign to win hearts and minds.

May 10, 2006|Dawn C. Chmielewski | Times Staff Writer

Nintendo Co. wants people to remember why they play video games: Because they're fun.

While Sony Corp. and Microsoft Corp. position their next-generation game consoles in an all-out fight for control of the living room, Nintendo hopes to emerge the big winner with a cheaper, simpler machine whimsically called Wii.

"We will give you more fun for less money," said Reggie Fils-Aime, executive vice president of marketing for Nintendo of America, which Tuesday showed off Wii in advance of today's opening of the Electronic Entertainment Expo at the Los Angeles Convention Center.

The show, referred to as E3, marks the official beginning of a six-month campaign to woo consumers thinking about buying a new game machine for the holidays. That's when Nintendo, Microsoft and Sony will fight head-to-head-to-head to establish an audience for their rival consoles.

Although Microsoft's Xbox 360, which arrived in November, will have a year's head start, game buyers tend to wait until all competing systems are on store shelves so that they can comparison-shop. Game makers use E3 to stake out strategy and build buzz.

Nintendo surprised many game industry analysts with Wii, a relatively basic machine that offers none of the multimedia bells and whistles of Xbox 360 or Sony's PlayStation 3. Instead, the company behind Mario and Donkey Kong is aiming at casual players and families.

The company said it would ship Wii in the fourth quarter. It did not reveal pricing.

"I think they did a great job of showing the possibilities of the new system and, without going into the pricing, hinting it will be more affordable and more mass-market appropriate," said Anita Frazier, entertainment industry analyst for NPD Group. "They are certainly being true to their mantra of wanting to expand the gaming community."

In addition to such perennial gamer favorites as "Metroid Prime" and "The Legend of Zelda," Nintendo showcased a lineup Tuesday of no-learning-curve titles -- including tennis, baseball, golf and fishing -- that placed less emphasis on graphics than on immediate gratification.

Wedbush Morgan Securities analyst Michael Pachter called Nintendo's strategy "brilliant but risky."

Sony, by contrast, appears to be aiming at the high end of the gaming market with PS3, a powerful machine that will start at $499 when it ships in November. Even at that price, however, many analysts favor Sony to win the biggest market share.

PS3 is crucial to Sony's larger strategy of exploiting technology to deliver entertainment such as music and movies in new ways. To that end, PS3 will include Sony's proprietary high-definition DVD system, Blu-ray.

Microsoft, meanwhile, will attempt to extend the Xbox 360's early lead on PlayStation 3 by linking game play on the console to Windows-based PCs and mobile phones. Chairman Bill Gates, in his first E3 appearance, predicted that Xbox 360 would be in as many as 10 million homes before the first PS3 reaches stores.

To compete against Sony's Blu-ray, Microsoft will offer an accessory that allows Xbox 360 to play a rival high-definition DVD format, HD DVD.

Gates said Microsoft would take advantage of its experience with computer desktop software, messaging systems and mobile phones to extend game play.

Vista, the new version of the Windows operating system due in January, will allow console and PC gamers to play one another -- across hardware platforms, Gates said. This feature, dubbed Live Anywhere, also would extend to mobile phones, permitting someone on a game console to send invitations to a friend wirelessly.

"The platform can really unleash developers to do more things," Gates said.

Analysts applauded Microsoft's strategy -- even though it might not be the primary reason a consumer chooses one game console over another.

"I think Microsoft is making a very intelligent bet in exploiting its PC dominance," Pachter said. "I think accelerating the convergence of PC and mobile phone and Xbox 360 was the biggest news I heard so far."

The big question: How many consoles can the $25-billion industry support?

Three consoles have historically been able to coexist. But analysts note that the market is getting cluttered -- with older hardware, hand-held systems and cellphones.

"It's no longer, 'Is there room for three console systems?' " Frazier said. "Is there room for seven or eight platforms? It is starting to feel like too much. At this point, I couldn't guess which ones are going to rise to the top."

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