The portable video game hardware market is getting crowded, expensive and competitive very quickly. Nintendo (PINK: NTDOY) has been the uncontested champion of handheld gaming since releasing the Nintendo Game Boy in 1989. Today, though the Nintendo DS is still the market leader, its dominance has been challenged by Sony‘s (NYSE: SNE) PSP and, most significantly, Apple Inc.‘s (NASDAQ: AAPL) entire line of portable electronics, including the iPad, the iPhone, and the widespread iPod Touch. The next generation of portable hardware is expected to hit the market in spring 2011, with Nintendo’s glasses-free stereoscopic 3D device, the Nintendo 3DS, an expected fifth-generation iPhone from Apple, and two rumored devices from Sony, the PSP 2 and a Sony Ericsson (NASDAQ: ERIC) Playstation Phone. Now Japanese electronics giant Panasonic (NYSE: PC) is set to enter the fray with its very first proprietary gaming device, the Panasonic Jungle.
The Jungle looks both familiar and foreign as a portable gaming device. It’s got an oblong, clamshell shape not dissimilar to the original model of Nintendo’s DS handheld, buttons mounted on its shoulders as well the cross patterns of buttons aligned on the right and left sides of the handheld familiar from devices like the PSP. The big difference between Panasonic’s device and other gaming handhelds is the full QWERTY keyboard and mouse trackpad set between the more traditional control interfaces. The PC-style interface reveals the Jungle’s chief focus: massive multiplayer online games (MMOGs).
The one untapped gaming market in the portable space is MMOGs in the vein of Activision Blizzard‘s (NASDAQ: ATVI) World of Warcraft. Investors know that MMOGs are big business; World of Warcraft has an audience of more than 10 million subscribers worldwide, each of them paying $14.99 per month. While Panasonic would have a difficult time taking on Apple, Sony, and Nintendo in the traditional retail and downloadable portable game markets, they will be completely unchallenged when they release the MMOG-centric Jungle.
In addition to all the new portable game hardware, the next year will see a number of high profile MMOGs launched. Electronic Arts-published (NASDAQ: ERTS), Bioware-developed Star Wars: The Old Republic is expected to release in spring 2011, as is Sony Online Entertainment’s DC Universe, which will feature famous, Time Warner-owned (NYSE: TWX) characters like Batman and Superman. Activision Blizzard will be releasing World of Warcraft: Cataclysm, the latest expansion to World of Warcraft, this December. The recently revealed Battlestar Galactica Online, developed by the General Electric (NYSE: GE) and NBC-owned Bigpoint Games, is reported to be launching side by side with Panasonic’s new device.
Panasonic hasn’t officially announced the Jungle’s technical specifications, nor has a price point for the system been established. Expect the technology to be advanced and the price to be high though. Given its nature as an MMOG-device, the Jungle will have to be built to accommodate a variety of games from different developers, all with different technical requirements. It will also need to be able process large amounts of data over wireless connections. Electronic Arts shareholders, Activision Blizzard shareholders and investors in the online gaming space should be excited by Panasonic’s new device, but they need to hope that the hardware is affordable and that it works properly before they celebrate a brand new revenue stream.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
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