A phone maker builds a handheld console and misreads the market

What happened

The reasoning was sound enough. Nokia sold enormous numbers of phones, phones were becoming capable of running real games, and a device that combined the two might take the portable market from Nintendo. The execution went wrong in ways that became famous. Making a call meant holding the device sideways against the head, a posture the press mocked relentlessly. Changing a game cartridge required removing the battery. The screen was tall and narrow, an awkward shape for games designed on any other system.

Software was the deeper problem. The library was thin and leaned on ports that ran better elsewhere, and the price sat well above a Game Boy Advance. A revised model fixed the worst of the ergonomics, and the brand survived for a while as a games service on ordinary Nokia handsets, but the hardware never found an audience. Retailers reported returns and slow movement, and the product became shorthand in the trade press for a convergence device that satisfied nobody.

The underlying prediction was correct. Within five years phones would host the largest gaming audience on earth, and the companies that got there did so by treating the phone as a phone and letting software arrive through a store rather than a cartridge slot. Nokia's mistake was building a games console with a phone bolted on, at a moment when the winning shape turned out to be a general-purpose device that happened to run games extremely well.

The world at the time

Mobile phones in 2003 played simple games delivered by carriers, usually a few kilobytes in size and sold through opaque menus with a share taken by the network operator. Nokia was the largest handset maker in the world. Nintendo owned portable gaming outright, and no one had yet built a phone with a proper screen, storefront and processor.

What it changed

Dedicated gaming phones effectively ended as a product category. When phones did take over portable play, they did it with touch screens and centralized app stores, an approach Nokia was poorly placed to follow. The episode is regularly cited when a company proposes hardware that tries to be two things at once.