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In a bid to cash in on the growing popularity of hand-held gaming devices, NVIDIA Corporation (NVDA - Analyst Report) recently unveiled its new portable gaming device called “Project Shield,” which is based on its Tegra 4 processor.

The new device features a controller identical to popular gaming consoles and a tablet-like display. The integration of controller with a tablet screen will likely enhance the gaming experience and will mainly target gamers opting for shooter games. With the launch of the new gaming device, NVIDIA seeks to diversify its business operations.

NVIDIA’s Tegra processors have gained immense popularity and are increasingly being used in Google Inc's Nexus 7, Microsoft Corp’s (MSFT - Analyst Report) Surface tablet, HTC's One X smartphone and Sony Corp’s (SNE - Snapshot Report) PSP hand-held gaming device.

The newly introduced Tegra 4 has four distinct features, along with a low-power fifth core that is used for light processing tasks such as email or messaging. In this new gaming device, NVIDIA has used 1.9 GHz ARM A15 cores. This new technology will enhance product performance with 45% less power consumption.

Industry experts expect the Asia-Pacific region to rule the gaming market with respect to both growth and market share gains. The video gaming industry in BRIC countries however are expected to grow in line with the economic expansion.

NVIDIA delivered decent third quarter 2013 results. Although the decline in PC demand may affect results in the upcoming quarter, new offerings from the company can help win new customers.

Moreover, the acquisition of data chip manufacturer Icera will add value to NVIDIA’s product portfolio. Moreover, the newly introduced NVIDIA PhysX technology will likely attract more gaming customers.

However, the company is concerned about the fact that Tegra offerings are underappreciated by investors. NVIDIA’s performance may be tempered slightly by the weak gaming market, economic slowdown in Europe and increased competition.

Currently, NVIDIA holds a Zacks Rank #3 (Hold).

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