Pricey Parts Threaten Profits of New Game Machines

Videogame giants Sony and Nintendo, gearing up to launch hotly anticipated handheld gaming devices, face a shortage of key parts, which could crimp profits and sales of the rival products when they hit stores later this year. Nintendo Co Ltd's dual-screen handheld, DS, and Sony Corp's PlayStation Portable (PSP) come armed with all the bells and whistles of a modern game machine, which is good news for gamers but potentially bad for the two companies.

Surging demand for mobile phones and digital cameras has created a shortage of small liquid crystal displays (LCDs). That spells trouble for Nintendo and Sony since the DS offers two, three-inch (7.6 cm) screens and the PSP promises a 4.3-inch monitor. "When we started thinking about a product with two screens, we didn't expect LCD supply to be so tight. In that respect, this isn't going according to plan," Nintendo President Satoru Iwata told Reuters last week at E3, the industry's annual trade show.

News source: Reuters

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