New player enters game console biz

By Staff and reports

OSAKA, Japan (CNN) -- A surprising new player is attempting to win some of the billions being spent each year on computer games.

Matsushita Electric, the manufacturer behind the National and Panasonic brands, said it plans to market a game console with DVD playing capability by early November.

Sources at the world's biggest consumer electronics maker told the Japanese business paper Nihon Keizai Shimbun the firm plans to price the new machine, which includes elements of Nintendo's Game Cube, at about $324.

Matsushita hopes the new appliance will help it catch up with rival Sony, the maker of the wildly popular PlayStation 2 game machine.

PS2 challenger

Matsushita is a major supplier for the Game Cube, Nintendo's soon-to-be-released video game home console.

The Game Cube will be unleashed on the Japanese market September 14 with a price tag of $208, followed by its U.S. debut on November 4 at $199.95.

Matsushita's device combines elements of the Nintendo Game Cube as well as DVD playing capability, and targets the DVD-capable PlayStation 2.

"In this thing that looks like a toaster oven, there's a DVD player with Game Cube functions that is set to go against the PlayStation 2," Lisa Spicer, a Tokyo-based game analyst at ING Barings, told CNN.

The company originally priced the new console at $162 more than the Game Cube, but lowered the figure after Sony reduced the price of the PlayStation 2 from $322 to $284 at the end of June, the Nihon Keizai Shimbun reports.

Nintendo ally

The new game product is also a powerful ally for Nintendo in the battle to win more game title buyers.

Both the Matsushita offering and the Game Cube share the same internal architecture, and thus support the same array of Nintendo-produced game titles.

"At the end of the day for Nintendo, there will be more machines out there with Game Cube software capability," said Spicer.

"And they won't play PlayStation 2 titles."

Last week, the Nihon Keizai Shimbun reported that Matsushita was expected to post a $160 million consolidated operating loss for the quarter.

Matsushita Electric declined to confirm the report.

Industry observers say the company has faced a steady slide in profits over the past decade, undermined by a bloated, top-heavy work force and a lack of hit products.