Nintendo’s Little iPad Killer

Most of the press Nintendo, the world’s No.1 video game console company, gets is for its Wii machine which has kept a lead in unit sales over the Microsoft (MSFT) Xbox 360 and Sony (SNE) PS3 for more than two years.

But, the largest selling device that Nintendo makes is the DS, or dual screen, handheld which was introduced in 2004 and has sold over 125 million units worldwide since then.

Nintendo will get into the large screen electronic pad business with the newest version of the DS, the DSi XL, which will go on sale in the US on March 28.

The DSi XL will have two 4.2″ screens which makes it nearly twice the size of its predecessor. The price of the unit will be $189. 99.  The screens together are nearly as large as the iPad’s single screen and the smaller versions of the Amazon Kindle

The new product will have some crude social network navigation and chat functions.  The most important feature of the DSi XL is what Nintendo calls its 100 Classic Books application which “transforms the Nintendo DS family of products into a library of timeless literature when it launches on June 14 at a suggested retail price of $19.99, highlighted by 100 works from authors such as William Shakespeare, Jules Verne, Jane Austen, Mark Twain and more. Readers can adjust the size of text, place bookmarks and even download new content via the Nintendo Wi-Fi Connection service.”

The books product looks like the beginning of the sort of e-book/e-reader features that drive the sales of the Amazon Kindle and the Apple  iPad.

It would be audacious for a consumer electronics company to challenge Apple under almost any circumstances. But, Nintendo has something that almost no other consumer electronics company has. Nintendo has sold nearly 200 million of its branded game devices in the last half decade. Brand valuation research firm Brand Z said the Nintendo brand was worth $18 billion last year. That put it just behind Amazon’s $21 billion valuation.

Nintendo’s place in the consumer electronics market may not be as powerful as Apple’s but the Japanese company competes on the same level as Microsoft, Sony, and Amazon. That means when Nintendo launches a major new product its effects on the competition should not be underestimated. The marketers of the PS3 and Xbox 360 found that out the hard way.

Douglas A. McIntyre