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Analyst: 3DS Expected To Launch In U.S. Next March

Analyst: 3DS Expected To Launch In U.S. Next March

June 17, 2010 | By Eric Caoili

June 17, 2010 | By Eric Caoili
More: Console/PC

Analyst firm Lazard Capital Markets expects that Nintendo will launch its much-anticipated 3DS system in Japan late this year and in North America next March, with a predicted price point of $249-$299.

LCM describes the Nintendo 3DS, a new DS model that displays games in 3D without requiring special glasses, as a "winner at E3", received well both by industry and trade professionals.

"We have little doubt that the 3DS will prove successful for Nintendo and quite possibly third-party software publishers, as the 3D-effects will give reason for consumers to upgrade from their current devices, as well as potentially reduce the cannibalistic impact from smartphones and tablets," says LCM analyst Colin Sebastian.

"Our conversations with developers and publishers suggest there is broad support for the 3DS," he adds. "... we believe [the Nintendo 3DS] will resonate well with consumers."

The firm's outlook for Wii wasn't as positive, as it believes that Mirosoft and Sony's own upcoming motion control setups, Kinect and Move respectively, will cut into Wii's market share. LCM points out that one shouldn't count out Nintendo's home console just yet, though.

"... high price points for Kinect and Move could be the Wiis salvation during the upcoming holiday season," argues Sebastian. "Meanwhile, a strong slate of first-party software from Nintendo should keep core fans engaged with the platform until there is a platform refresh, as early as 2011, in our view."

The analyst says Kinect will probably launch in the $100 to $150 range, with anything above $150 unlikely considering the Wii's current price ($199) and a presumably low cost of materials for Microsoft's motion controls accessory. The platform holder is expected to ship some three million units of Kinect worldwide by the end of 2010.

Sebastian notes that Microsoft might have trouble selling Kinect to core gamers, though: "Our conversations with multiple developers and publishers at E3 suggest there is some doubt whether Kinect is suitable for core gamers, such as first-person shooters (e.g. Call of Duty), where any lag would be detrimental to game-play."

"That said, we see enormous potential for the platform as a unique and useful interface to home entertainment," he continues. "Moreover, if commercially successful, we believe that Kinect has the potential to drive accelerating growth for Xbox and increase attach rates, which are already fairly robust."

As for Sony, the analyst says its PlayStation 3 is moving increasingly to a digital entertainment hub strategy with its new PlayStation Plus service, access to movies and TV programs, and more: "While initially marketing the PS3 as a core game platform, we believe that Sony has turned a new page and now is developing a broader digital entertainment platform."

LCM also believes Activision came off as a winner for investors at E3, reaffirming long-term margin targets and providing an upbeat outlook for its key franchises. It says that Call of Duty: Black Ops, for example, is tracking ahead of Call of Duty: Modern Warfare 2 at a similar point prior to its release.

"... a robust Blizzard pipeline, new online business models, and growth in Asia provide an opportunity for reaccelerating growth," says Sebastian. "We believe that Activision is well positioned to maintain its industry-leading margin profile with multiple opportunities for growth in coming years."

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