The Nintendo DSi, released Sunday, can play DS games, take photos, play and store AAC-encoded music files, and download games.
Photo courtesy NintendoSunday’s release of the Nintendo DSi is in part an indication of where Nintendo is headed, but also the videogame business at large.
The $170 DSi supercharges the smash hit Nintendo DS platform by adding two cameras, an SD card slot, a Web browser, and the ability to download games over WiFi. But although the DSi clearly represents the downloadable future of handheld gaming, Nintendo says it’s not interested in leaping feet-first into iPhone territory. Plus, it won’t bring its catalog of cartridge-based games to digital either.
"We don’t want and we don’t see a world where products and titles live in a virtual world as well as a physical world," said Nintendo of America president Reggie Fils-Aime in a recent interview. "We see them filling very different needs for the consumer as well as for the business overall."
While much of the entertainment industry is going digital with downloadable movies and music, most of games industry is doggedly sticking with disks. The reality of the business as it stands right now is that the vast majority of sales come from retail sales of shiny DVDs.
Sony, meanwhile, says it does intend to release games for its portable PSP in both digital and physical versions. "We’re certainly not looking to walk away from retail. Retail is going to be of significant importance to us from now until as far as we can see," said the PlayStation maker’s John Koller in a separate interview. "But we do see the digital side growing, and becoming a more equal player in the space."
Meanwhile, Apple’s iPhone and iPod Touch have completely circumvented the retail market, selling all games through downloads. While neither Sony nor Nintendo are going whole-hog towards digital game sales, their additions of direct-download stores to PSP and DSi indicate that both see the writing on the wall — downloadble games are the future, just not right now.
Nintendo says it introduced the DSi because its research suggests that the current $130 model, called DS Lite, had reached something of a saturation point. Although it has sold over 100 million of the consoles, Nintendo says that most households only buy one DS system and share it among family members. What Nintendo wants is for each member of that household to buy his own DSi, personalizing it with his own photos, music, and games. With 2 million DSis sold in Japan thus far, the strategy seems to be working.
And although Nintendo hasn’t spoken about it publicly, DSi is beefed up under the hood. Its 133 MHz ARM processor is twice as fast as the original DS unit’s. And it has four times the RAM at 16MB. Right now, the DSi only uses this extra muscle for the photo manipulation software and Web browser. But as 1up.com noted on Sunday, this means that DSi has the potential to run more graphically impressive games — if and when Nintendo decides to release any.
Even if the two companies’ ideas of what content is appropriate for direct-download sales differ, both are ramping up this part of their business cautiously, with a slow trickle of content rather than a flood. Neither company is willing to do what Apple has done with its portable platform, opening the sales channel up to any garage developer who spends $100 on an SDK.
Some suggest that this is in part because brick-and-mortar retailers are forcing game publishers to choose between digital and physical. The creators of the Penny Arcade Adventures game said in 2008 that game specialty retailer GameStop would not carry its game on disc if it was released first through direct download.
Are Nintendo and Sony correct that the death knells of physical game distribution have yet to be sounded? Or are they dragging their feet, opening up a huge opportunity for a company like Apple to pull out in front? Neil Young, a former executive of Electronic Arts who quit to start an iPhone games developer called ngmoco, said as much in his Game Developers Conference keynote.
There’s nothing about the PSP and DS hardware that prevents them from competing with iPhone. It’s just Nintendo’s and Sony’s cherry-picked game release lineups. Should either company decide to open the floodgates, both platforms have the hardware to support more emphasis on digital.
For the time being, DSi as it stands will only further cement Nintendo’s victory over Sony in the traditional handheld gaming business. Whether its latent power boost and largely undefined future library of downloadable games will be enough to sustain Nintendo’s recent record-breaking performance into the age of games on demand is still up in the air.
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