Don’t Forget about Nintendo’s Game Cube

by Chris Connor

The Most Mysterious Console

Sony’s {SNE} PlayStation2 is one of the most hyped electronic consumer products ever, the Xbox is being widely heralded as well due to Microsoft’s {MSFT} marketing muscle, and Sega’s {SEGNY} Dreamcast has flopped.  Does that sum up the current next-generation console landscape?  Not quite.  Lurking in the shadows is an old favorite in consoles, Nintendo {NTDOY} with its forthcoming Game Cube.  Without question, the Game Cube has generated the least amount of attention among the major consoles; however, the Game Cube should not be underestimated or overlooked in the upcoming wars. Read on to see why.

Changing Its Ways

To keep from being overwhelmed by the Xbox and the PlayStation2, NTDOY is making some much-needed changes.  The most obvious change will be that a Nintendo console will utilize CDs for the first time instead of bulky cartridges.  This means that every major next-generation console will now incorporate CDs.  More importantly, the company wants to gradually shed its image as a console maker primarily for kids (Mario Brothers, Donkey Kong, and Zelda) and focus more on mature audiences like the PlayStation2 is and the Xbox will be.  With the original PlayStation finally getting game consoles into the mainstream, video games are now entertainment vehicles for people of all ages as more and more console games are incorporating mature themes.

Nintendo’s move to more mature games can be best seen with the recently released Conker’s Bad Fur Day.  Just looking at the title character (a squirrel named Conker), you would never know that this game rated M for Mature, but that is exactly what it is ranked.  The M rating, which is highly unusual for a Nintendo game, comes as a result of swearing similar to South Park and crude humor like a giant mountain of manure with corn for teeth.  Guessing Nintendo’s strategy, don’t be surprised to see more games similar to Conker’s Bad Fur Day on the Game Cube. Overall, the move to more mature games is a good one for Nintendo and must be done when considering the competitive landscape, but it should be done in a way that will not alienate its faithful younger audience.

What Makes the Game Cube Standout from the Rest of the Pack?

Unlike the PlayStation2 and the Xbox, consumers will not be able to play DVD movies on the Game Cube.  The upside of this omission is that it allows Nintendo to focus more intently on games, which should make it easier for developers to develop games for the Game Cube.  Though this is an important feature, the Game Cube’s biggest advantage will be its compatibility with what is to be the 800-pound gorilla in handheld gaming, the Game Boy Advance.  Gamers will be able to connect the Game Boy Advance to the Game Cube via a cable and then use the Game Cube as a controller.  This adds new functionality such as the ability to call an offensive football play in total secrecy, constantly having an off-screen map available for games like Zelda, or continuing a game that was originally started on the Game Cube (e.g. a gamer could start an adventure game at night, transfer the data to the Game Boy Advance and then re-enter the game the next morning while on the subway).  Though the original Game Boy does allow gamers to transfer data to and from the Nintendo 64, the actual ability to communicate came from the game cartridge itself, not the actual system.  The Game Cube and Game Boy Advance tandem marks a dramatic evolution because the ability to communicate is built into the systems themselves and not peripheral devices.  This functionality presents a strong marketing argument and is likely to be a key driving force for the sales of both the Game Cube and the Game Boy Advance.

The Components Makers

Since there is little information on which publicly traded game makers will make games for the Game Cube and what those games might be, this article will focus on publicly traded Game Cube component makers instead.  IBM {IBM} will be supplying the console’s main processor and Conextant {CNXT} will be supplying the system’s 56k modem and broadband adapter, but the Game Cube will not likely have a significant impact on the sales of those two billion dollar companies.  The companies that could be affected substantially if the Game Cube is a huge hit or failure are ATI Technologies {ATYT} (through its acquisition of ArtX), SONICblue {SBLU}, and Applied Microsystems {APMC}.  Though ATI Technologies is also a billion dollar company, it needs the Game Cube to be successful in order to keep up with dominant Nvidia {NVDA} in the 3D graphics arena.  Nvidia not only is having it chips being used in the Xbox, but has also won over former key ATI customers Gateway {GTW} and Compaq {CPQ} and recently purchased 3D graphics competitor 3Dfx.  It would be wise for ATI to maintain any advantage that it can over Nvidia, before it falls prey to the current 3D graphics king as well.

SONICblue and Applied Microsystems should be affected substantially more by the Game Cube than the other three publicly traded component makers simply because of the potentially larger percentile impact on their revenues.  APMC will be charge of supplying game developers with the hardware necessary to make games for the Game Cube, while SBLU will look to cure a problem that was blatantly evident on the Nintendo 64, a graphics blur.  SONICblue’s compression technology instantaneously decompresses textures without a loss of performance, which means substantially more detailed graphics without adversely impacting the performance of the system.  The technology has a compression ratio of six to one, which means that one MB of memory can act like six MBs of memory.  The PlayStation2 does not use this technology, so it will be interesting to see if this technological advantage for the Game Cube will have any effect on the game console wars.