In late March, video game icon Nintendo (NTDOY) let the world know of its plans for a 3D-capable portable gaming device. And despite all the hullabaloo over 3D technology in the flat screen TV market, this could very well be the first real connection between 3D entertainment and a viable consumer market.
Avatar saw big success in the box office due to its 3D experience, and related companies like producer/distributor News Corp. (NWS) and theater operator IMAX (IMAX) got a lift. Many companies are hoping they can provide a similar experience in the home and cash in off expensive new hardware for home theaters.
NTDOY has already unveiled efforts to make its handheld Nintendo DS console an educational tool for schools and museums, and this move into 3D is another “outside the box” move as the industry leader tries to gain greater market share. With a track record of experimentation and innovation with its Wii console and Wii Fit hardware, NTDOY is very well suited for this move.
And on a broader note, the video game industry is the most natural fit for 3D technology for a number of reasons.
First, video games are a $20 billion business with an audience that is willing to spend big on hardware. We recently learned that February video game sales were a bit disappointing, but that’s because a lot of hardware demand was sated over the Christmas holiday shopping season. When new gadgets come out, you can expect loyal video gamers to spend on the latest technology for the best gaming experience
Secondly, unlike television video games have more potential for 3D technology to actually enhance the experience. While some sporting events like the Final Four are experimenting with 3D, a lot of programming just doesn’t work in the same way. Can you honestly tell me that the evening news, a soap opera episode or American Idol would be that much more compelling in 3D? Video games have more movement, more action, and more potential for the new technology.
Lastly, 3D technology for TVs involves glasses for nearly all brands right now — and different manufacturers demand different specs. That means for a family of four, everyone needs a pair of glasses. And as glasses get lost or broken, you have to keep buying them. But the tentatively titled 3DS from Nintendo wouldn’t need 3D glasses, and the video game stock Nintendo’s plan to increase the screen size on its DS console will make it a true 3D experience without any added glasses or gizmos.
Surely other video game stocks will come out with 3D technology soon. Though Sony (SNE) video game hardware sales seem to be fading, the company is slowly developing its own wireless motion technology akin to the Wii and will likely jump on this bandwagon next. Same goes for Microsoft (MSFT) and its Xbox console.
3D isn’t much of a gamechanger for HD-TVs just yet. People are watching and waiting to see if devices will ever live up to the hype or just be a very expensive passing fad. However, the one area where 3D may have a lasting impact is the video game industry, and Nintendo is first in line to cash in.