Nintendo: 24 million Game Boy Advance in first year

Nintendo's Game Boy Advance will have a 32-bit CPU similar to the Sony PlayStation

In this story: Popular handheld game player RELATED STORIES, SITES

TOKYO, Japan (Reuters) -- Japan's Nintendo Co. Ltd. moved aggressively on Thursday to take a lead in the game machine market, saying it would produce 24 million of its new Game Boy Advance handheld players in the year after its March 21 launch.

The scale of the production plan exceeds many analysts' expectations and reflects the company's ambitious strategy in the portable game market. Nintendo currently boasts more than 90 percent of handheld-game sales worldwide.

"Given its strong brand name and ability to offer attractive game titles, Nintendo is likely to maintain its top position in the global handheld game market," Nomura Securities senior analyst Yuta Sakurai said.

Nintendo's announcement prompted Deutsche Securities to raise its rating on the company to market perform from underperform.

Deutsche senior analyst Takashi Oya said the game maker's shipping plans exceeded his estimates for first-year production by 14 million units.

"Nintendo has secured the ability to purchase liquid crystal displays (LCDs), a core element of the game player. It will have a positive impact on the share price," he said in a report.

A shortage of components for existing Game Boy Color players, particularly LCDs, has prevented Nintendo from increasing shipments to meet demand worldwide in the past year.

Analysts have raised concerns about Nintendo's ability to raise production of Game Boy Advance swiftly because the new console has a 50 percent bigger screen than the existing Game Boy, meaning higher LCD demand.

But a Nintendo spokesman said: "We are confident of bringing monthly production of Game Boy Advance to two million by June thanks to a deal with Sharp Corp."

Japan's biggest LCD maker has boosted LCD production specifically to meet extra demand for the new game machines.

Nintendo, which has sold more than 100 million of its first-generation Game Boy players since its launch in 1989, making it the world's top-selling handheld game player, had announced it would ship one million of the next-generation model in the first 10 days after its launch.

The Kyoto-based company plans to start producing Game Boy Advance, which is similar in size to the original eight-bit Game Boy but boasts e-mail and Internet access, in January. It aims to release around 10 game software titles in March.

Nintendo plans to start exporting the game machines ahead of a July launch in North America and Europe, a spokesman said.

Game Boy Advance will run on a 32-bit central processing unit, similar to that used in Sony Corp.'s original PlayStation home game machine, offering a faster reaction function and clearer image than the original console.

Deutsche's Oya said sales of the new game player and related software should result in additional operating profits of up to 30 billion yen ($267.1 million) a year for Nintendo.

Nintendo, which is set to release its next-generation home video Game Cube machine next July in Japan, to challenge advanced consoles from rivals such as Sony's PlayStation 2 and Sega Corp.'s Dreamcast.

Industry sources said the planned launch of Game Cube may be delayed because many software titles will not be ready on time.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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