Technology Overmatches Game Makers Nintendo May Have Outsmarted Itself With 64-Bit Hardware

Nintendo Co. is counting on sales of its new, cuttingedge game player to help it recapture the top spot in the $11 billion-a-year video-game market.

Trouble is, the company that became synonymous with video games in the 1980s has such a master stroke in its latest invention that it could well beat itself at its own game.

Nintendo unveiled its Nintendo64 player and companion “Super Mario 64” game in the U.S. last week. The game, starring Mario the plumber, wowed usually cynical reporters and analysts with its feel of an animated movie rather than a choppy cartoon - a look created by the Silicon Graphics Inc. technology that also revved up “Twister” and “Jurassic Park.”

Viewers at the E3 trade show called the game a masterpiece and its legendary creator, Shigeru Miyamoto, a genius.

Still, it took the Japanese company more than two years, virtually unlimited resources and a top-shelf software development team to create the new product.

Nintendo depends on outside software companies for about two-thirds of its games. Those companies won’t have the time or money to match Nintendo’s feat. And it’s the popularity of the software titles that spurs sales of the game consoles.

“Super Mario 64 is probably the greatest video game of all time,” said Neil West, editor-in-chief of Next Generation, a video game magazine that tracks the technology. “But, there is no way that third parties can be expected to bring the same resources to the table. Even Nintendo will have a hard time matching its own game.”

Nintendo shares have taken a beating for twice delaying the Nintendo64 debut, first saying software developers needed more time to create the games, then citing a chip shortage. The company also took heat for defiantly standing by its decision to make the game on a cartridge instead of the more popular and, for software developers, more profitable CD-ROM.

Last Thursday, the day after Nintendo unveiled the new game in the U.S., shares climbed to 8570 yen - the highest point since September 1993. Shares fell 30 yen to 8370 in Tokyo today after the company reported its first profit increase in three years as a stronger dollar cushioned the blow from a drop in sales.

Nintendo is so confident that gamers will want the Nintendo64 that it has no plans to match recent price cuts from rival Sony Corp. PlayStation and Sega Enterprises Saturn machines, said Nintendo of America Inc. Chairman Howard Lincoln.

“It’s no different than Chevrolets and Cadillacs,” said Lincoln during the E3 show. “If you’ve got a $5,000 Chevrolet and somebody is coming in with a Cadillac, you better get your price down to what it’s really worth. What they did was a tacit admission that their Chevrolet is overpriced.”

Veteran Sega and newcomer Sony have been selling their 32-bit game players for the past 18 months. Both companies, led by Sony, cut the price of their machines in the U.S. last week by $50 to $199.