NVIDIA recently announced Project Shield, a small Tegra-4-powered handheld device consisting of a controller and display. This is seen as a bold and potentially misguided move into portable gaming consoles. The company just gave the specifics on pricing and availability, stating that it would be priced competitively and launch in the second quarter. There are a lot reasons affirming that the Project Shield has little or no chance of attaining commercial success.
Companies typically like to employ one of their popular disruptive tools, the pricing. For example, Amazon.com tasted incredible success with its Kindle lineups due to its willingness to leave their competitors behind by selling the devices at an unbeatable price and later made it up with content sales.
But this approach comes with a precondition that the potential disruptor must operate a content platform, and that’s the reason why these pure hardware OEMs have to struggle so much in order to compete.
NVIDIA does not have any platform of its own, instead is knocking into its current TegraZone gaming collection and other titles available on Google Play. Besides, NVIDIA specifically had already said it intends to profit up-front in an official blog post: “The business model that stems from this means we’ll make our money by selling the device to gamers.
The portable gaming console market has come down. Two of the main addressees, Nintendo and Sony, which are also the market leaders are also facing difficulties selling their own respective 3DS and PlayStation Vita devices.
Last October, due to weak 3DS sales, Nintendo reduced full-year guidance in part. The company also dropped full-year 3DS outlook to 17.5 million. Similarly, in November, Sony too toned down PS Vita forecasts to 10 million following a previous reduction.
NVIDIA is doing a very strange thing. It’s making great traction in the tablet market, particularly among gamers, so as to keep it aware of the potential there relative to the stand-alone portable gaming console market.\
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