N-Gage Dis-Engaged?

In a last attempt to boost sales for an ineffective launch, Nokia is claiming to have sold some 400,000 N-Gage game units, according to Reuters news service. Were these 400,000 units sold to end users, or to retailers who are now stuck with fancy boxes on their shelves? The details are very shady but analysts predict the actual numbers are far lower than what Nokia is claiming.

Nintendo is claiming that they will sell some 20 million GameBoy Advance units in their current fiscal year, which started in April.

See press release below.


Nokia Sold 400,000 N-Gage Decks in Two Weeks

By Lucas van Grinsven, European Technology Correspondent

AMSTERDAM (Reuters) - Nokia, the world’s largest mobile phone maker, said on Wednesday its N-Gage portable game decks had made a strong debut, but analysts say a key gauge of its success will be Christmas sales.

“We’ve sold around 400,000 N-Gage in the first two weeks,” Ilkka Raiskinen, senior vice president entertainment and media at Nokia Mobile Phones, told Reuters in a telephone interview.

The number refers to models Nokia has sold to shops and other retail outlets since the launch on October 7. Raiskinen said sales to consumers were “very good in Europe and Asia Pacific” and added he had already received follow-up orders.

The Finnish company has set itself a target to sell between six and nine million N-Gage devices before the end of 2004 as it challenges the dominance of Japan’s Nintendo which controls the portable gaming market with its GameBoy Advance.

Nintendo has said it aims to sell some 20 million GameBoy Advance units in its current fiscal year which started in April.

Analysts were not very impressed with Nokia’s initial sales.

“For a global number it’s not a huge quantity. Their market is going to be best in regions like Europe and Asia where sales to consumers is strong. In the United States, Nokia will still need to address issues such as the high price,” said financial analyst Edward Williams at Harris Nesbitt Gerard in New York.

N-Gage sells for around 300 euros and $300 before subsidies from telecoms operators. GameBoy Advance sells at around $100.

EXPENSIVE GAME DECK, CHEAP PHONE

Although expensive compared with a GameBoy, N-Gage is cheap compared with Nokia’s top handsets which feature a large color display, a radio and MP3 music player, short-range Bluetooth connection, tri-band GSM network reach and musical ringtones. Doubling as a cell phone, N-Gage has all the same features.

“With N-Gage you get a lot for your money. The big question, however, is not how many they’ve sold in the first two weeks, but how Christmas sales will turn out,” said Ben Wood at market research group Gartner Dataquest.

To Nokia the 400,000 units roughly equal the total number of mobile handsets it produces in a single day. The Finnish firm is targeting new and smaller markets like the portable games segment because handset revenues have gone flat.

Nokia said that some 5,000 on-line game sessions were carried out every day by N-Gage owners. N-Gage is the first portable game deck on which players in different locations can battle against each other over the mobile phone network.

Raiskinen said Nokia would now extend its network of retail outlets for N-Gage beyond the 30,000 with which it has started. This could include electronics and gaming shops and web sites.

“We need to improve our retail presence. Most (consumers) still go the telecoms sales channels to buy an N-Gage,” he said.

Most first N-Gage buyers were young men, with a big cluster of consumers around 20 years old, and a group aged around 30. GameBoy Advance consumers are mostly in their teens.


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