Today is launch day for Sony Corp.'s PlayStation Portable, the new mobile video-game-playing device from the consumer electronics giant behind the popular consoles PlayStation and PlayStation 2.
Although the handheld-game market is practically synonymous with Nintendo Co.'s Game Boy and Game Boy successors, Sony is taking on more than Nintendo with its flashy $250 gadget.
With a versatile device that can also play music and movies, the consumer electronics giant is hoping for a hit that attracts an older and more affluent audience while stealing attention away from portable entertainment gadgets such as iPods and mini-DVD players. With the PSP, packed in a shiny black case, Sony is hoping that it has figured out a Walkman for this generation.
Kazuo Hirai, Sony Computer Entertainment America's chief executive, said the first million PSPs, which go on sale in North America today, are "naturally weighted" toward people who bought Sony's PlayStation 2, but that the company is shooting for an even broader audience.
"The PSP market is going to be just as big, if not bigger," Hirai said. "We hope to quickly branch out and bring in users who see the PSP for all the other attributes it has, in addition to the gaming features," he said.
The company has sold about 33 million PlayStation 2s in North America since the product's launch in 2000, but Sony's game business has been weaker recently. Sales by Sony's game division were down 23 percent in its most recent quarter from the comparable quarter a year earlier. Sales by Sony's electronics and music divisions were also down.
The handheld-game market makes up about a fifth of the video-game industry, according to David Cole, president of DFC Intelligence in San Diego. Sales of handheld games totaled $4.5 billion last year, and Cole said that figure may double this year because of a new product from Nintendo and the introduction of the PSP.
Blazing a trail in world of 'convergence'
Sony's new device hits retail shelves with two dozen PSP-compatible games. Because earlier versions of many of the games were hits, Sony already has captured the interest of many hard-core gamers. Some specialty game shops were to open at midnight to sell the PSP. In the Washington region, Best Buy stores will open two hours early, at 8 a.m.
Sony is trying with the PSP to blaze a trail into the mostly hitless world of "convergence." That buzzword has obsessed the tech world for more than a decade, and Sony hopes that the PSP will successfully pull off some gadget lovers' dream of having nearly every type of digital diversion in one case.
But the PSP is not the first device from Sony that has been pitched as the "next Walkman." Sony's MiniDisc products, for example, mostly fizzled because they used a Sony proprietary audio technology that competitors did not enthusiastically embrace. Likewise, the Memory Stick Walkman, an early digital music player, was mauled by critics for its clunky interface, which made getting music on and off the gadget a chore.
The PSP might have both handicaps. Early reviews have praised the PSP as a slick-looking, excellent handheld that allows multiple users to compete wirelessly, but some critics have knocked it for being somewhat inelegant as a media playback device.
Sony's biggest gamble with the PSP may be that the device will be successful enough to push a new technology standard into wide use: the Universal Media Disc, basically a shrunken DVD that uses proprietary technology from Sony.
Sony is betting that PSP users will pay $20 for a movie that they can watch only on the device (games for the PSP cost $40 or $50). The first million units of the PSP will come with copies of the movie "Spider-Man 2," a Sony Pictures release. Other movies to be available in the format include "Kill Bill Vol. 1," "XXX" and "Terminator 2: Judgment Day."
Nintendo is still a giant
Nintendo has for years been the dominant company in the handheld-video-game market, though others have tried. Nintendo held its course as a business dedicated solely to games while maintaining an official skepticism of the benefits of convergence; there's no movie or digital music player in the Nintendo DS, for example.
During Nintendo's reign, handheld gaming has been mostly a pastime for the younger set. Its new dual-screen handheld game player costs $100 less than the PSP and is aimed more at the junior high school crowd than Sony's hoped-for 18-to-34 demographic for the PSP.
If Sony's PSP succeeds, it might not be at Nintendo's expense, game industry observers say, because Sony is trying to build a new market with the PSP. "The Nintendo DS is still a great machine. I just think [the PSP] is expanding the market at the older end," said George Vincent Broady, co-founder of the Web site GameSpot.
Sony surprised the world decades ago when its Walkman cassette player hit the market, revived the company and changed the way people listened to recorded music by making it more portable. Its PlayStation, introduced in 1995, was another hit and made it socially acceptable for 28-year-olds to admit that they still played video games. Could the PSP be the product that combines these two famous Sony success stories?
Michael Pachter, analyst at Wedbush Morgan Securities, said he thinks so. The PSP, he said, "is Sony finally acting again on a vision that somebody had 25 years ago when they came up with the Walkman."
In five years, Pachter predicted, the PSP will have a built-in hard drive and a TV tuner -- and the world will have mostly forgotten about Apple's iPod. "This is the Sony mission," he said.
