E3 Roundup: Nintendo’s Video Game Revolution

At last week's Electronic Entertainment Expo (E3), Nintendo—the third major player in the video game market—also revealed plans for its next-generation video game console. However, unlike competitors Sony and Microsoft, Nintendo was strangely vague about its next console, dubbed the Revolution. And that, Nintendo says, is all according to plan.

Here's what we know: The Revolution will use an IBM microprocessor of some kind, and an ATI-designed graphics chipset. The console itself is small, almost tiny, and will feature wireless controllers. The Revolution will use a proprietary optical disk format for new games but will also be backward compatible with GameCube titles.

Perhaps the most exciting announcement about the Revolution concerned Nintendo's wide range of legacy game titles. In an unexpected development, Nintendo will let Revolution owners download any game that was released for its NES, Super NES (SNES), and Nintendo 64 systems. Mario and Zelda fans, rejoice.

Although Nintendo didn't promise a particular release date, most observers believe the Revolution will ship well into 2006. That places the Revolution street date far behind that of the Microsoft Xbox 360 (November 2005) and Sony PlayStation 3 (March 2006).

The strange aspect of the Nintendo announcement, however, is the complete lack of details. Unlike Sony and Microsoft, which seemed to one-up each other in technical areas such as teraflops and gigahertz, Nintendo says the Revolution is all about the games and, as such, technical specifications shouldn't matter. Also, Nintendo is forgoing the digital-hub strategy espoused by Sony and Microsoft: Not only will the Revolution not work as a digital hub and integrate with PC-based digital music, photos, and video—it won't even play DVD movies out of the box. Nintendo, however, will ship a separate DVD-playback adapter of some kind.

Quaint as Nintendo's position might seem, the company could be on to something. Unlike, say, Microsoft's Xbox, Nintendo's video game unit is profitable, so even though the GameCube is a distant third in market share (with 20 percent of the US market), its operating margin is over 25 percent.

Consider, too, the company's focus on games. Although Nintendo is widely criticized for falling behind Microsoft, the company is, in fact, the number-two seller of video game titles in the United States behind Electronic Arts (EA). One criticism that the company has yet to overcome, however, is that its games cater largely to children. With the GameCube, Nintendo made a little headway into more adult titles, and the company pledges to continue that trend with the Revolution. That strategy makes sense: A generation of gamers that grew up on Nintendo's early consoles are now all grown up and eager to continue gaming.

All posturing aside, Nintendo says it will reveal the Revolution's system specifications by the end of the year. Flush with the PC-busting power of the Xbox 360 and Sony PlayStation 3, video game fanatics will likely be disappointed by the Revolution's specs. But if Nintendo is right, none of that will matter. I'm starting to think the company might have a point.

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