Report: Gaming, Digital Music Distribution and Entertainment Opportunities 2011-2016

2.2 The Threat to Smartphone Gaming from the Nintendo 3DS

The 3DS marks the first significant new handheld console release in the past 3 years. Visiongain believe the perceived threat to the continued success of game apps remains low. Smartphone gaming is popular because consumer already own the hardware required and therefore the risk and cost factors are low. In Q1 2011 Sprint introduced the HTC EVO 3D while AT&T launched the LG Thrill, a US-branded version of the international LG Optimus 3D. Both are powerful with glasses- free 3D displays technologically similar to that used by Nintendo.

Figure 2.6: Nintendo 3DS

Source: Nintendo

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2.2.1 3DS Price Slash

In Q3 2011, Nintendo took the decision to dramatically cut the cost of the 3DS from ¥25,000 (around $400) to ¥15,000 (around $240) following disappointing sales figures - price cuts that were also mirrored in the UK, US and other countries. Early numbers from Japan suggest the tactic has certainly done the trick, with sales of the Nintendo 3DS soaring to reach their second highest rate.

According to Japanese publisher Enterbrain, 214,821 units were sold during the week leading up to August 14th. The sales figures mean the Nintendo 3DS experienced its second most popular week since its launch in February, when it sold 371,326 in seven days. Information on whether the price drops in the UK, which saw as much as £80 taken off the price, have produced similar surges in sales is not yet available.

Visiongain believes that dropping the price of the console after only a short period of time is a sign that sales figures are not as high as Nintendo would like. Several factors could have caused weak sales figures, such as low consumer demand, high price points and the threat from Smartphones. Visiongain believes that in an era when Smartphones can also display games in 3D, the era of the handheld games console as a separate device may be over.

2.3 Will 3D be a Game Changer in the Smartphone Market?

Consumer demand for 3D Smartphones is low yet most of the large OEMs are releasing their own versions. Inclusion of dedicated buttons to turn the 3D off, or flip off screen functions denote a tentative expectation of demand. The function can be used for photography but in order to truly pose a threat to the Nintendo 3DS the devices will rely entirely on game developers creating high quality 3D games. See Table 2.7 for a Summary of the key 3D Smartphones.

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Table 2.7: Key 3D Smartphones Expected Release Handset Description Price date 3D LCD capacitive , 16M colours, 480 x 800 pixels, 4.3 inches - LG 3D UI, 8GB Storage. 3G LG Optimus 3D 500 USD Q2 2011 Network HSDPA 900 / 1900 / 2100 HSDPA 1700 / 2100 / 850. Android OS, v2.2 (Froyo), upgradable to v2.3.

This is LG’s U.S. version of the LG Optimus 3D. LG Thrill will be using 2.2 Froyo ( Android) and later one will soon be updated to 2.3 Gingerbread it LG Thrill 300-350 USD Q3 2011 will be using 4G network of AT&T. It has a 4.3’ screen, dual-core processor (1Ghz), 16GB memory, and can gain access to LG 3D Space which is LG’s own marketplace for 3D applications. MT810 has a flip-off 3D screen. OS – Ophone, with 720p video recording, the screen has a Motorola MT810 300-400 USD Q3 2010 , transparent flip, capacitive touch sensor, camera at 5MP. This is Sharp’s latest addition to it’s collection of 3D phones. RAM (512 MB), built-in storage (2GB flash), Sharp Aquous Phone GPS, Wi-Fi, HDMI, HSDPA, digital TV Tuner, 1.4GHz 600 USD Q2 2011 SH-12C Qualcomm MSM8255 processor, the back camera can go way up to 8 MP, Android 2.3 . W960 has an AMOLED display of about 3.2’, a camera with 3.2MP, uses the TouchWiz 2.0 Samsung W960 190 USD Q3 2010 , the ability to switch 3D off, TV tuner and auto-focus camera. Sharp Galapagos 3D has a processor of 1Ghz, 3D screen of 3.8’, slide-out keyboard, button to use to turn on and off 3D, camera 9.6MP, QWERTY Sharp Galapagos 3D 500 USD Q4 2010 One with 8MP, 3D technology used is akin to what is being used in Nintendo 3DS – parallax barrier - stereoscopic display. HTC Evo 3D features a camera with 5MP, dual-core HTC EVO 3D 600USD Q3 2011 Qualcomm (1.2Ghz), RAM (1GB), and uses the 2.3 Gingerbread for its operating system. 2D can be optimized and be viewed in 3D when being Hitachi WOOO Ketai displayed. Camera (5MP), 3.1’ screen, eWallet, TV 400 USD Q1 2010 H001 tuners, infrared connectivity, , memory is expandable to 2GB. Source: visiongain

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