Raw Japan

Game on!

Nintendo still expects to make $4 billion this year and Sony to lose over $600 million, but last week may ultimately be remembered as a crossroads where each firm’s fortunes began to change directions, or at least when a 15-year battle for gaming supremacy again became competitive.

Electronics conglomerate Sony trimmed its overall loss forecast on Friday, while some of last quarter’s bleeding was attributed to what is now seen as its successful price cut for the PlayStation 3 console, jolting the PS3 ahead of its Kyoto-based rival’s Wii in monthly sales.

Nintendo, meanwhile, saw profit and sales declining at its earnings on Thursday with the main panacea a bigger screen handheld DSi LL console coming in late November, a move industry-watchers say is certain to diversify consumers’ handheld options but by itself won’t counter growing ennu-Wii.

On Friday, shares of each underscored investors’ views on whether a shrinking loss or slowing profit was more attractive, with Sony bought before its statement and Nintendo sold after its numbers.

Still, Nintendo, which began as a cardmaker and may have a thing for trumps, held its analyst briefing Friday at the same hour as Sony’s earnings, debuting the DSi LL. This followed a Nintendo price cut in September at nearly the same hour as Sony Computer Entertainment CEO Kaz Hirai was addressing the Tokyo Game Show, an event the reigning game giant eschews.

Before an interview with Reuters that day, console war veteran Hirai laughed when asked about Nintendo’s cut, adding: “Interesting timing.”

Sony game changer, or Game Over?

Sony unveiled its leaner, meaner and — most importantly – cheaper PlayStation 3 in Tokyo Wednesday after a gamescon debut in Europe, but it offered little beyond a quick glimpse of what it hopes will stop the money-bleeding of arguably one of the most troubled products in its history.

After rising to industry dominance with its PlayStation and PS2 consoles, Sony’s gaming unit grew to account for 60 percent of the conglomerate’s profit, and its chief, Ken Kutaragi, was seen as a possible future CEO.

But the next-generation PS3, initially with a “cell” chip and a price mid-decade of just under $600, has been a tale of woe, contrasting sharply with the wild success of Nintendo’s Wii console, with Kutaragi leaving Sony two years ago as chip and PS3-related losses mounted.

 In the wake of its early poor performance, Sony fiddled with the PS3, cutting its price and modifying the range of bells and whistles that came with the lowest and highest versions of the console.  

But some software makers recently fired warning shots, saying they may not make PS3 games unless Sony cut the price of the console. 

Nintendo’s game face

After a long spell in the gilded kingdom of record profits, Nintendo, the 120-year-old creator of Mario and Zelda, is again having to dodge barrels such as a high yen and consumers’ eternal quest for new kit. Its returns are slowing, though they are still to be envied with the firm forecasting $5 billion for the year ahead.

Last month company President Satoru Iwata told Tokyo journalists that Japan’s enthusiasm for its Wii was waning mildly. But he promised more software titles and said a new console would come when design wizard Shigeru Miyamoto ran out of ideas for the current hardware.

A few years ago around the debut of the Wii, Iwata, only the fourth leader in Nintendo’s history, said that by the time a product hits store shelves, the Kyoto-based firm is already deep in development of its next big thing.

So what is that large gorilla to come? Iwata’s not telling, but after substantially broadening the user base with more women and older game players and helping to untether gaming from merely a sedentary experience, a pot of gold is at stake if ennu-Wii is indeed setting in.

Nintendo, like many firms at the top of its game, doesn’t waste words on competitors (often not even acknowledging them as such). But Sony and Microsoft and plenty of unknown firms are deeply engaged in this multi-player scenario and have been gaining ground.

In the more than 30 years it has taken for gaming to become a passion for hundreds of millions and a multi-billion dollar business, calls on winners and losers have regularly proven premature or wrong.