Analysts: Nokia rethinking game phone strategy

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Analysts say that disappointing sales of game telephones are forcing Nokia to change its strategy on gaming products, writes the financial newspaper Taloussanomat on Thursday.
      Richard Windsor, an analyst for the Nomura Group, says that Nokia has invested more than EUR 300 million into game telephones, and that now is doing all it can to recoup its investment.
      "Switching to games was a sensible step for Nokia at the time. However, expectations were unrealistic, and the devices could not compete with today's devices manufactured by Nintendo and Sony", Windsor says.
     
Nokia is now working to make games a part of its new smart phones. The N93 model which was introduced last week, is the first of the company's N series, which allows the user to play N-Gage games on it.
      Kari Tuutti, head of communications for Nokia's Multimedia unit, confirms that the new games strategy will take full effect at the beginning of next year.
     
Nokia brought out its first N-Gage game phone in 2003. The next version was introduced in 2004.
      Windsor feels that the change in strategy means the end of the line for N-Gage game phones; Nokia is no longer spending money on the development of the devices.
      "Sales have been a great disappointment. I suspect that Nokia now wants to make as efficient use as possible of its game investments in new phones", Windsor says.
      Similar views are expressed by analyst Tuong Nguyen, an analyst at Gartner. He feels that games will be only one characteristic among others in new mobile telephone models.
      "The market shares of large game companies in wireless devices are so high that it is very difficult for Nokia to compete with them", Nguyen says.


Previously in HS International Edition:
  Nokia introduces new mobile game deck (2.10.2003)

Helsingin Sanomat