Nintendo and Sony will fight it out for the handheld game market over the next several years, reports In-Stat

Both firms will benefit from an extensive catalog of first- and third-party-developed game titles. Sony is trying to bring its established game console expertise to the world of handhelds with its new PlayStation Portable (PSP). A true portable convergence device, the PSP is also a portable digital audio and video player. Nintendo, which has dominated the market for many years, will find Sony to be a formidable competitor, though Nintendo will retain the upper hand for the short term, at least.

"With its Game Boy Advance SP and DS, Nintendo has two platforms that should appeal to slightly different demographics," said Brian O'Rourke, In-Stat analyst. "And Nintendo has a huge advantage in software. It is a general rule in the video game business that quality game titles drive hardware sales."

A recent report by In-Stat found the following:

-- Sony will be successful in this business because of its history of creating new consumer electronic devices that appeal to a wide range of consumers. Its demographic target of 18- to 34-year-olds will help it to outship all competing handheld consoles from 2005-2009.

-- Nokia will continue to struggle in this market, though it has shown the determination and resources to remain in the game.

-- Handheld game consoles are becoming convergence devices, adding additional options on top of gaming. Capabilities offered include digital audio and video playback, digital image viewing, camera, PDA and even GPS functionality.

The report, "Handheld Game Platforms 2005: More Competitors With Convergence Devices" (#IN0501827ID), forecasts the worldwide market for handheld gaming devices by vendor in terms of units ships and sales revenue generated. It also includes analysis of market trends and vendor profiles.