Nintendo Cannot Afford To Lose Handheld Battle With Sony

In life, no one stays on top forever. Empires decline, as do sports teams. People grow old, and companies eventually bow out to hungrier competitors.

As always, Mario to the rescue.

That said, Nintendo’s grip on the handheld market, while incredibly impressive, will someday end. When this will happen, of course, remains to be seen.

It began in the 80s with Game & Watch, those tiny LCD handhelds Mario and Co. produced for roughly eleven years. Things really exploded, though, with the Game Boy in 1989, largely because Tetris appealed to both casual and hardcore players, while Nintendo did an excellent job bringing its core franchises to the system.

In fact, the Game Boy was so tough it swatted all comers, from Sega and its Game Gear to NEC’s Turbo Express. Those portables were more advanced than Game Boy. They pushed more colors. Heck, they displayed colors, period, but it didn’t matter. Each one fell.

This continued with Game Boy Color, then Game Boy Advance and especially DS, which has sold over 151 million systems, a staggering figure when compared to Sony’s more powerful PSP, which gave Nintendo its biggest challenge, despite “only” moving 71 million.

Sure, the Game Boy Micro wasn’t a runaway success (2.4 million from 2005-2008), but we gave Nintendo a free pass because the publisher found ways to bounce back, and because most people didn’t take Micro seriously, anyway.

Now there’s 3DS. The dual screen machine stumbled out of the gate and seemed on its way out until the big N cut the price and finally delivered must have games. Now it’s on pace to destroy DS sales if all goes according to plan, key word being if.

Bottom line, the handheld industry has changed dramatically these past few years. Smartphone games have definitely taken a chunk (we can debate how much) from Nintendo’s market share, and Sony’s PlayStation Vita delivers near PS3 quality games on the go.

In other words, this is Nintendo’s greatest challenge that quite frankly, it cannot afford to lose, simply because we have no idea what would happen if this occurred.

The fight against Vita is much different compared to consoles. Nintendo traded first place with Sega in the 90s, lost steam against Sony the previous decade and wound up rebounding with Wii while also fending off Microsoft.

Paper Mario 3DS should be huge.

Point being, the console war has always been about which company can get hot at the right time with the best hardware and games, in stark contrast to handhelds, where it’s been all Nintendo.

Can it recover if PlayStation Vita takes off? Yes. You can’t give up on Nintendo after more than 20 years of excellence.

At the same time, the publisher’s stock was over $70 in 2008, and now sits just below $18. Meanwhile, Sony put together a stellar launch lineup for the Vita, and should make a dent in the west, thanks to a handheld Call of Duty this fall, in addition to all the games between now and then.

A 3DS flop and eventual loss to Sony could prove financially devastating. Nintendo apparently realizes this, which is why it had two Mario titles ready to go holiday 2011, and should have a banner year in 2012.

Whether that’s enough for it to retain the crown is anyone’s guess.

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