News : Nintendo rolls out Wii games, Sony takes to video

By Kiyoshi Takenaka and Jennifer Martinez

LOS ANGELES (Reuters) - Riding the success of its popular Wii video game console, Nintendo Co Ltd (7974.OS: Quote, Profile, Research, Stock Buzz) on Tuesday unveiled fresh titles for gamers to throw frisbees and rock on, while rival Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) turned to Hollywood with a new video service.

At back-to-back news conferences on Tuesday at the E3 video game industry trade show in Los Angeles, Nintendo and Sony unveiled their different approaches to the market.

Industry leader Nintendo struck a confident note and stayed with its winning formula -- easy-to-play games for the mainstream audience. Sony, the once dominant market force, showed how the PlayStation 3 could do more by introducing a new video service.

The company said it would rent and sell movies and TV shows over the Internet for the PlayStation 3 and double the hard drive capacity of its main PS3 model.

The new video distribution service will attempt to close the gap with Microsoft's Xbox Live service and feature movies and TV shows from major studios, including its own Sony Pictures, Warner Bros. and News Corp's (NWSa.N: Quote, Profile, Research, Stock Buzz) 20th Century Fox.

Sony's online network has failed to keep pace with Xbox Live, Microsoft Corp's (MSFT.O: Quote, Profile, Research, Stock Buzz) online service that gives the Xbox 360 console an advantage over the PS3, said Billy Pidgeon, an analyst at research firm IDC.

"Longer term, Microsoft is better positioned. What it's doing with Live will have better long term effects," he added.

Sony dominated the global video game industry for a decade starting in the mid-1990s. But the PS3, its latest console, has lagged Nintendo's Wii, and in recent months has been competing neck and neck with Microsoft Corp's (MSFT.O: Quote, Profile, Research, Stock Buzz) Xbox 360 for second place in the United States.

Microsoft declared on Monday it was certain the Xbox 360 would sell more units over its lifetime than the PS3.

But both companies have not been able to derail the success of Nintendo's Wii, which has bested more powerful machines from Sony and Microsoft with a cheaper console and its motion-sensing controller that can be swung like a bat or a sword.

"A true paradigm shift has taken place in the global games market," Nintendo President Satoru Iwata said at its news conference.

The firm has broadened the gaming market well beyond hard-core video gamers and expects to gain more adopters with its new "Wii Music" game, which allows players to simulate playing more than 60 instruments using its controllers.

Nintendo also introduced a more sensitive Wii MotionPlus controller add-on to debut next spring, along with a new suite of Wii sports games.

"Wii Sports Resort" lets users throw a frisbee to a virtual dog or duel one another with swords.

UNDERWHELMING

Many Nintendo fans at the presentation cheered politely while legendary game designer Shigeru Miyamoto played a virtual saxophone on "Wii Music," but some analysts were not impressed with Nintendo's new software line-up.

"We are distinctly underwhelmed by Nintendo's presentation today," Hiroshi Kamide, analyst at KBC Securities, wrote in a note to clients.

"The line-up for Christmas 2008 currently looks inadequate."

As expected, Nintendo did not announce a price cut since its Wii consoles are still in short supply at many retailers.

On Sunday, Microsoft cut the price of its best-selling Xbox 360 Pro model game console with a 20-gigabyte hard drive to $299 from $349. Microsoft plans to phase out that model, replacing it with a new Xbox 360 model with a 60-gigabyte hard drive for $349.

Sony announced a similar strategy. It plans to launch in September a PS3 game console with an 80-gigabyte hard drive for $399, the same price as the PS3 with a 40-gigabyte hard drive.

It will eventually phase out the smaller hard-drive PS3 machine and make the 80-gigabyte version its mainstay model as it focuses on making the console a home entertainment hub, capable of storing downloaded movies and games, it said.

(Additional reporting by Kemp Powers and Daisuke Wakabayashi; Editing by Jennifer Tan)