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Nintendo, which until now has remained silent regarding its on-line strategy, released its Internet gaming initiative for the Nintendo GameCube on Monday.
The initiative, which Nintendo says will begin this autumn, will see the video games company launch its first on-line game, Sega's Phantasy Star Online Episode I & II.
Until now there was some concern that Nintendo was falling behind rivals Microsoft and Sony, makers of the Xbox and Playstation 2 consoles respectively, both of which had already released on-line strategies. But there was a suspicion that the Japanese company would reveal its on-line plans soon.
The firm said on Monday that it is making software development kits available to developers worldwide, who ostensibly will begin creating on-line games for the company's flagship product, GameCube. Moreover, the firm will begin selling both the Nintendo GameCube v.90 Modem Adapter and the Nintendo GameCube Broadband Adapter this autumn in the US for around USD34.95 each.
According to Nintendo, its on-line strategy is built on the philosophy that the Internet will be most successful if the game play is extremely compelling and highly affordable. In this vein, the company's initiative consists of a development program, a favourable publisher business model, and support for all consumers whether the player connects by modem (narrowband) or broadband.
More specifically, the company says that it will not require royalty fees from revenue generated by a publisher's game played on-line through the Nintendo GameCube. The intent of the low-risk model, Nintendo claims, is to encourage developers to consider new genres of games for on-line play.
Game publishers themselves will be responsible for operating the on-line networks on which their games run.
Yet despite the push from the big three console makers, it remains to be seen whether the on-line space will prove to be a popular platform for video game players. After all, Sega released its Dreamcast in 1999 with on-line abilities, but sales remained disappointing and the plug was pulled on Dreamcast last year.
Moreover, Jupiter Media Metrix said in December 2001 that the PC will remain the number one vehicle for on-line gaming in the US despite the increased availability of connected video game consoles. According to Jupiter, the number of American households owning a games console connected to the Internet will increase from 700,000 in 2000 to 12.3 million by 2006, but people who play games on-line via their PCs will continue to account for most of the gaming subscription revenue.
Jupiter forecast that subscription revenues from on-line PC games will be USD1.5 billion by 2006, while similar revenues from connected console gaming will only reach USD250 million in the same period. But the company does admit that the investment in on-line gaming for video console makers will begin to pay off after 2006 when broadband penetration increases in the US and the current generation of consoles are ready for replacement.
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