Can Nintendo DSi Become the iPhone of Game Handhelds?

nintendo-dsiU.S gamers, rejoice: After months of hearing tantalizing tidbits about the Nintendo DSi, available in Japan since last November, we finally have word that it will go on sale here April 5th, for $169.99. The latest addition to Nintendo’s DS handheld console line bristles with new features, but in my opinion, its most potentially game-changing element is “DSiWare,” an online app/game store where DSi owners can purchase/download games via the handheld’s wireless connection. “Developers big and small are invited to create software” for DSiWare, Nintendo announced proudly today. Some interpret this feature as Nintendo’s direct response to the iPhone and its game-heavy App Store, and I agree.

But can Nintendo meaningfully compete with iPhone? As I complained last year, few of the company’s Internet services have impressed, and Apple’s smartphone has a tremendous head start. Michael Pachter, gaming analyst with Wedbush Morgan, thinks it’s just a matter of time: “Once there is a big [DSi] installed base,” he told me via email, “the number of apps should be comparable.” But I’m skeptical its download service will be anywhere as appealing as the App Store. In fact, analyst David Cole believes DSiWare is “just one of many features and is not necessarily a huge driver.”

Then there’s the DSi’s recession-unfriendly $170 price point — almost as costly as the iPhone (without also being a phone). Pachter thinks we may see price cuts across the DS line, announced perhaps as early as June’s E3 Expo, with the DSi’s MRSP lowered to $149. That would definitely make the DSi a competitive alternative to potential iPhone customers who are more interested in getting the phone for its game apps than they are for the AT&T plan that comes saddled with it.

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