Sharp Won’t Say If It’s Supplying 3D LCD Panels to Nintendo

A CE source told Consumer Electronics Daily last week that Sharp is supplying Nintendo with the LCD panels, which are believed to use parallax-barrier technology to achieve 3D effects without the use of special glasses (CED March 25 p1). Nintendo has remained mum beyond the few details it supplied last week. The company said it will elaborate at E3 in June.

M2 Research analyst Billy Pidgeon said Tuesday he believes that Nintendo decided to make the 3DS announcement when it did -- less than a week before Nintendo of America launched the DSi XL in the U.S. and less than three months before E3 -- because it wanted “to get out in front” of rumors that were widely circulating about the 3DS in Japan. The “sloppy marketing dissonance of the announcement” wound up “hijacking the DSi XL North American release, which was so unlike Nintendo,” he said. The rumors started after Nintendo executives made vague statements about a DS successor system and a video demo of parallax 3D being used on a DS system circulated online, Pidgeon said. “Just before” Nintendo made its 3DS announcement, Japan reporters “quoted several local analysts” in their country “to piece together a more detailed preview of the next-gen handheld,” he said. Pidgeon said he had “heard a bit about the dev kit from developers” at the Game Developers Conference early this month.

"I can’t imagine” that the 3DS announcement’s effect on the DSi XL launch is “positive,” Pidgeon said. He added that his channel checks, like ours Monday (CED March 30 p6), indicated the XL “isn’t a hot seller."

Most major U.S. retailers didn’t comment on how the XL has done since it started selling Sunday. But a Target spokeswoman said, “Sales of the DSi XL are meeting our expectations, and we've had adequate supplies of them.” She declined to speculate on whether the 3DS announcement may be affecting XL sales. Amazon was the only other major U.S. retailer that commented on initial XL sales. The bronze model was No. 31 on its list of best-selling videogame products and the burgundy model No. 41 Monday afternoon. The XL was faring a bit worse at Amazon.com Tuesday afternoon, with the bronze model at No. 32 and the burgundy SKU at No. 50. Both SKUs were in stock.

But Pidgeon said the XL “will serve Nintendo’s handheld strategy to some extent.” For one thing, it could be “a spectator pull, the idea being that those watching over the player’s shoulders,” such as on a train, “would have a clearer view of the game” on the XL because of the larger size of its dual screens, he said. The “spectator experience with Wii was very effective,” he said. The XL could be attractive to “older customers with declining vision,” and the device is a sign of Nintendo’s “intent to dabble in the e-book category,” he said. The device also “gives Nintendo more pricing elasticity to bring down prices” on the current DSi and DS Lite systems, Pidgeon said. Nintendo will be able to cut prices on the older systems “from a position of strength rather than weakness” now, he said. “Apple performs a similar trick with iPods,” but Nintendo has been “the leader in this tactic, going back to multiple models of Game Boy,” Pidgeon said.

Pidgeon predicted a “late Q4 2010 release” of the 3DS “with the usual limited run and a $10-20 reduction on DSi/DS hardware.” Those actions “would add some punch to not only Nintendo’s numbers but to the North American retail category overall,” he said.