Opinion: 2004 is the year of the handheld console

While much attention continues to focus on the next-generation home platform plans of Microsoft, Nintendo and Sony, many senior industry executives expect that the real punch up of 2004/05 is going to be in the mobile console market - and both Sony and Nintendo are of the opinion, privately stated at least, that their handheld platforms are more important, right now, than their plans for the home market going forward.

It's not hard to see why this market is so exciting for the companies involved. Sony proved last week at the Game Developers Conference that the technology to put PS2-standard graphics onto a handheld device exists, when it showed off a demonstration video of Backbone Entertainment's Death Jr. for the PlayStation Portable. Nintendo has proved the commercial importance of the handheld market with the Game Boy Advance SP becoming the fastest selling console in North America over its first year at retail, and is continuing its reputation for innovation with the dual-screen, touchpad-driven Nintendo DS. The third player in this game, Nokia, may not have got a lot right with the original N-Gage, but the coming weeks are expected to show us the next generation of the product, and it would be foolish to discount the Finnish mobile phone giant just yet.

Perhaps what makes this market most interesting, however, is the determination with which the major players are approaching it. Nintendo's 14 year history with the Game Boy range makes the handheld console market into a matter of pride for the Kyoto-based company, and there's no way it will allow itself to be relegated to second or third place in this area. Sony has staked a significant amount of its reputation on the success of PSP, and calling the system the "Walkman for the 21st century" is a fairly major step given Sony's corporate psyche regarding that landmark device. Nokia, meanwhile, shows every sign of having been stung by the harsh criticism and poor commercial performance of the N-Gage, and the company seems to perceive making the mobile gaming platform into a success as a major point of pride. The competition in this sector is sufficiently fierce that Microsoft, which once harboured ambitions to launch an Xboy handheld to complement the Xbox, last week signalled that it would not be entering the handheld console market in any form.

By the end of the year, we'll have seen the PSP, the DS and the N-Gage 2 launching in at least some territories. Christmas 2004 is only the first skirmish; expect 2005 to be a genuine clash of the titans as the industry's handheld giants compete not for the space under your television, but for the smaller, and potentially even more important, space in your pocket.