NEW YORK (CNN/Money) – While Nintendo's next generation console gaming system likely won't hit living rooms until 2006, that doesn't mean the company won't introduce new hardware this year. A new analyst report suggests the company is planning to ship the next version of the Game Boy portable gaming system by the end of 2005.
If so, that would be the third new handheld gaming system in as many years for Nintendo, whose Nintendo DS was one of the hottest items of the 2004 holiday season and Game Boy Advance SP was one of the must-have gifts of 2003. The new Game Boy would face stiff competition, though, from Sony's PSP – which will hit U.S. stores in March.
"We believe it is likely that the next version of the Game Boy Advance SP will ship as early as this holiday, ahead of most expectations of calendar year 2006," wrote P.J. McNealy of American Technology Research.
The new system, he predicts, will launch at a $99 price point, with prices on the Game Boy Advance falling to $49. Nintendo DS prices, he wrote, will likely remain unchanged.
Nintendo downplayed the report, but stopped short of denying it.
"There is always speculation on what the next Game Boy will be, however, at this time there are no announcements about a new Game Boy Advance SP product," said Beth Llewelyn, senior director of public relations for Nintendo of America.
Official confirmation of the new Game Boy could come as early as March 10, when Nintendo president Satoru Iwata is scheduled to give a keynote speech entitled "The Heart of a Gamer" at the upcoming Game Developer's Conference in San Francisco.
It's unclear at this point what sort of advances might be found in a new Game Boy. While this may be a graphical leap forward like many next generation consoles, it could just as easily be an incremental step, slightly enhancing the company's current offering.
Releasing a new Game Boy on the heels of the Nintendo DS, which features two screens and a touch pad, might seem a bit odd, but Nintendo has been quite vocal in saying the two systems are built for different audiences. The Game Boy has traditionally been aimed at children, while Nintendo hopes to reach an older audience with the DS.
McNealy said the numbers seem to be backing Nintendo up.
"The Nintendo DS has, by and large, been additive to Nintendo software revenue and units sales and not cannibalistic," he wrote. "Even with the DS launch in November, GBA software revenue and unit sales were up double-digits in December and January."
That's not to say it has all been smooth sailing for the DS. While the system enjoyed tremendous success during the holiday period, software sales have been rather disappointing. So far in 2005, new title releases have been minimal, which has stymied the system's momentum.
And the imminent launch of the PSP will only make the fight harder. Sony's system has been getting rave reviews from overseas users – and demand will almost certainly exceed supply when the PSP launches in the U.S.
But a new hardware launch would help keep Nintendo top of mind with consumers during the holiday season. Sony will be heavily promoting the PSP as December draws near – and Microsoft is expected to launch the next version of its Xbox gaming system this fall. Without a new device, Nintendo could easily be overshadowed.
There's also the real threat of piracy with the current generation of Game Boys. Although piracy of GBA games has not been a major problem in North America, the company has seen a dramatic rise of digital theft in the Asia-Pacific region. The cartridges used for GBA cards are fairly easy for hackers to crack and the games are often posted online. The DS, which uses flash memory cards, has not had the same problems, writes McNealy.
A new Game Boy could give a boost to some game publishers. While industry leader Electronic Arts (Research) and Take Two Interactive Software (Research) do not have big presences on Nintendo's handhelds, THQ (Research) makes a large number of games for the system. And Activision (Research) has shown an increased interest in them recently.
"We believe that a new GBA SP could mean between $10 million to $20 million of additional revenue for both Activision and THQ in FY06, and an additional $0.02 to $0.04 in earnings," wrote McNealy.
The question is, though: Will Nintendo's audience be willing to shell out another hundred bucks (or more) for the third year in a row? Or will they invest their gaming dollars elsewhere?
Morris is Director of Content Development for CNN/Money. Click here to send him an email.