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Nintendo to create WiFi hotspots for DS handheld

TOKYO (Reuters) - Nintendo Co. Ltd. (7974.OS: Quote, Profile, Research) said on Tuesday it would establish 1,000 WiFi hotspots in Japan by the end of 2005 where owners of its DS portable game machines can play games with others online for free.

The company is planning a similar service for overseas markets, aiming to expand sales of the DS and protect its leading position in the handheld game console industry from Sony Corp. (6758.T: Quote, Profile, Research) , which recently launched its own handheld machine.

Nintendo President Satoru Iwata told a news conference that 25 overseas and Japanese software companies have said they were interested in developing games that are compatible with WiFi, a widely adopted standard for short-range wireless networks.

WiFi connections have grown increasingly popular in recent years, used by consumers and business travelers in airports and coffee shops to access the Internet.

Nintendo plans to launch two compatible games -- Mario Kart DS and Animal Crossing DS -- by the end of the year.

Iwata said online gaming had yet to take off and spread to a wide audience of users because of various drawbacks, including a laborious process to get connected to a network and consumers' unwillingness to pay a monthly fee for access.

"Because of these hurdles, only a small percentage of people that have bought online-compatible games have actually connected to a network and played online," Iwata said.

"We would like to create an environment where more than 90 percent of the people that buy our WiFi-compatible games have tried them at least once online."

The Kyoto-based videogame maker said the hotspots would be located in department stores and toy retailers such as Toys R Us-Japan Ltd. (7645.Q: Quote, Profile, Research) where its consoles and games are sold.

Nintendo dominates the portable game industry with about 94 percent market share and aims to strengthen its grip with the DS as it goes up against Sony's new PlayStation Portable, which was launched last year.

It expects to more than double sales of its DS to 12.4 million units in the year to next March.

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Software sales for DS, which it launched late last year, are expected to more than triple to 35 million units.

Shares of Nintendo ended trade in Osaka down 1.57 percent at 11,300 yen. The benchmark Nikkei average fell 0.47 percent on the day.

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