There is only one drawback to the lucrative massively multiplayer online role-playing game market: It is shackled to traditional computers. Activision Blizzard’s (NASDAQ: ATVI) World of Warcraft currently hosts 12 million players worldwide, generating approximately $1.9 billion per year, and that’s not including secondary fees or the secondary market for virtual goods. When the company releases the latest expansion for the game, World of Warcraft: Cataclysm, the publisher will see a surge in new subscribers and a flood of lapsed subscribers rejoining to indulge in the new content. Still, it must be frustrating to know that while MMOs of Warcraft‘s ilk can be evergreen cash cows, they still can’t reach players during their morning commute or while any time they’re in transit and a laptop is simply too bulky. How can MMO publishers capture those players that turn to Apple’s (NASDAQ: AAPL) iPhone or Nintendo’s (PINK: NTDOY) DS when they’re on the go?
Enter Panasonic Corp.’s (NYSE: PC) new handheld codenamed Jungle, a portable gaming device tailor-built for MMOs like World of Warcraft. Bloomberg reports today that the company’s United States-based unit has begun sending out invitations to registered customers to test early versions of the hardware. While Panasonic spokesman Akira Kadota confirmed the early tests of the Jungle handheld, he declined to comment on when investors will see it debut, its price. Also unknown: How will Panasonic overcome the numerous technological hurdles facing a portable device that demands a much more reliable Internet connection and higher processing speed than the average smartphone or tablet PC?
The Jungle, announced in October, represents the Japanese tech giant’s return to the video game industry more than a decade and a half after bowing out following the failure of the expensive and unpopular 3DO console. Whether Panasonic will repeat the mistakes of the past remains to be seen. There is ample opportunity for disaster with the Jungle device. The reason portable consoles like the Nintendo DS, the Apple iPod Touch and iPhone have been successful is that software made for those devices tends to be uniquely suited to portability. That is something MMOs, which require significant time investment and co-ordination with numerous players, are most certainly not. While not a failure, Sony’s (NYSE: SNE) Playstation Portable has failed to reach its greatest possible audience due to its software being more time-intensive and suited to home consoles than on its competitors, and its games are significantly less demanding than the average MMO. “We know other companies out there have traditional hand-held gaming covered. We’re doing something very different,” says Panasonic’s e-mail inviting players to test the Jungle. That something different may not be what consumers weaned on the light gaming fare of mobile phones and Nintendo machines will spend on. The gamble can’t be reassuring to Panasonic shareholders.
Still, now is the time for Panasonic to strike. While Jungle won’t release in time to capitalize on World of Warcraft: Cataclysm‘s release, it may come out in time to host Electronic Arts (NASDAQ: ERTS), Bioware, and Lucasarts’ much-anticipated Star Wars: The Old Republic MMO due out in the second quarter of 2011, as well as Sony Online Entertainment and Time Warner’s (NYSE: TWX) DC Universe Online. It is also rumored that the NBC Universal (NYSE: GE) and Bigpoint Games Battlestar Galactica MMO is being developed specifically for Panasonic’s Jungle. Until pricing and specification details emerge, Panasonic shareholders will simply have to trust that the company isn’t pouring capital into the development of another 3DO.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
