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NET EFFECT: Hardware's back to save the day

NET EFFECT: Hardware's back to save the day

History is about to repeat itself. The day will come very soon when it will be fashionable to complain about people seen in public with strange electronic devices.

The launch of new handheld gaming devices from companies including Sony and Nintendo at May’s E3 conference in Los Angeles will give people another excuse to trot out the snide remarks once reserved for early adopters of mobile phones.

We’ll be on the bus or train grunting with disapproval at the beeps and blings emitted by a new generation of 'handhelds'.

And to top it off, we’ll probably start reading stories in the newspapers about how handheld games are destroying our children’s future. Yes, these are disturbing times for society’s technically inept.

But, regardless of the social melee, the arrival of products such as Sony’s PlayStation Portable (PSP) and Nintendo’s DS next year is nothing but good news for the channel.

These products could not have come at a better time for resellers and retailers in the entertainment and consumer space.

With any luck, handheld games will alleviate the hardware drought induced by Sony and Microsoft’s delay in launching new gaming consoles. Until now, we’ve had nothing to get excited about since Apple’s (“I shall call him”) mini-iPod.

So what’s all the fuss about?

Take the PSP for example. I’m not about to give you a technical lecture but the device reportedly supports more than 16 million colours, comes with 32GB of RAM, and supports the 802.11b wireless standard. You can expect a similar experience, although on a smaller scale, to that of your lounge room console.

So that will satisfy the geeks. But what’s really interesting from a broader perspective is that gaming vendors are attempting to capitalise on a shift in consumer behaviour that’s created the converged entertainment and IT market.

On the social side, think about what’s happening to the TV media. Reports from the companies such as Nielsen Media Research that claim men between 18 and 35 are turning off their TVs in favour of gaming consoles.

Men (and presumably some women) are ditching TV channel surfing for the joys of shooting scary monsters in 26 different places on their bodies. I can tell you from personal experience in my house, that when the Xbox is not running games, it’s playing DVDs. And I’m not missing the TV.

So presuming that we’ve now got the time to play games, hardware makers are hoping that we won’t miss the lounge room either. Idle moments spent in public places like planes, trains and automobiles could be become the new lounge room.

It’s a situation that, according to a recent article in The Australian, has resulted in Australians spending more than $800 million on games. Of that figure, consoles comprised more than $250 million.

That’s a lot of money when you consider the spending spree that begins after a portable device is purchased.

Take the iPod, for example. Not only does it encourage people to buy songs online through iTunes (although not yet in Australia), but Apple is also counting on this product to serve as a marketing vehicle that will reach an untapped market: PC buyers.

Apply that idea to portable handsets and there’s millions in software revenue at stake. And if you look at a product such as Nokia’s new N-Gage QD, resellers can also use that device to sell mobile phone plans.

Yes, there’s a sea of entertainment revenues out there, but this time we can’t just blame the kids.


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