Signal Hill senior research analyst Todd Greenwald predicts widespread success for Nintendo's upcoming 3DS, but warns that motion-sensing peripherals from Microsoft and Sony present "risky" propositions.
Greenwald notes that the glasses-free 3D effects of Nintendo's 3DS are a big draw, but warns that Nintendo may face difficulty in getting its customers to adopt the new technology at a high price point.
"With its huge fanbase and widespread 3rd party software support, the only thing that could derail the 3DS now is too high of a price point," Greenwald said. "We think $199 is the best bet."
In contrast, Greenwald describes Microsoft's motion-sensing peripheral Kinect as "a big risk." Greenwald explains that while price will play a big role in whether the technology catches on, Kinect also presents a significant challenge for Microsoft's marketing department.
"Kinect clearly appeals to the casual gaming crowd, and offers very little for core gamers (who make up the vast majority of the 360 installed base)," Greenwald notes. "So the most likely consumer to benefit from Kinect likely doesn’t yet own a 360 (and may already own a Wii), therefore they obviously need to buy Kinect and a 360, which will cost upwards of $400."
"At this point in the console cycle," Greenwald concludes, "the entry price points for new gamers should be coming down, not up."
Greenwald finds that Sony's Move accessory, in comparison, adopts a "more measured approach to motion controls, by doing what has already been done before on the Wii, but doing it in HD and with more precision."
"That said," Greenwald continues, "the Move isn't cheap either – while the main bundle is just $99, most households will need at least 2 controllers, driving the price up to $150 or more."
Greenwald predicts that both companies' motion control products "will have limited impact in near term," and warns that small install bases will make it difficult for publishers to generate significant revenue from compatible products for "quite some time."