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November 7, 2008 8:34 AM PST

Why the PSP is the key to Sony's future

by Don Reisinger
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I've been tough on Sony over the past year for the mistakes I think it has committed with the Playstation 3. I'm a firm believer that Sony should bring the price of its console down and drop the price of Blu-ray players to make its format more appealing to consumers.

But just because I believe that, it doesn't mean that there isn't any hope for Sony to turn things around. And I still believe that there's no debating that the Playstation 3 is probably one of the most capable devices on the market. But if Sony really wants to reach a position of dominance in the video game industry again and make people realize that it's offering a fine alternative to other products in the market, it needs to tie its future to the PSP.

Why the PSP? It's simple: Sony's handheld is an unbridled success that has caught some people off-guard. In the handheld market, it's extremely difficult for other companies besides Nintendo to gain a foothold. But in just a few short years, the PSP has been able to persevere through its rough start and become one of the most popular devices on the market.

Realizing that, Sony needs to make the PSP a central focus in its strategy going forward. If the company won't drop the price of the Playstation 3, the best way to bring more people to its console is to use the PSP's huge installed base to its advantage.

When you compare Sony's sales numbers, it becomes abundantly clear why the PSP is its key to the future. According to sales figures derived from NPD, Sony has sold about 16.5 million Playstation 3 consoles since its release and 39.57 million PSPs since that device's release. And although that figure isn't quite as high as Nintendo's 84.6 million DS units sold, it's a major number that we shouldn't overlook.

With that many PSPs in the wild, Sony can tap into a huge market of people from across the globe that don't necessarily own a PS3 and haven't felt the need to own the console yet. By using Apple's patented convergence plan that brings together its different devices, Sony can turn PSP owners into PS3 owners in a flash.

Now, there are some titles on the PSP that employ some basic features that can be combined with your PS3. But so far, many of those options have been relatively simple and haven't had the kind of integration that would make the vast majority of PSP owners want to own a Playstation 3. Sure, a rear-view mirror might appeal to some, but in order to coax more people to buy a Playstation 3, Sony needs to make the connection between its PSP and PS3 more compelling.

Maybe it's just me, but wouldn't the ability to take any game from the PS3 to the PSP and back to the PS3 be the killer feature that would put Sony back on top? Or what about the option to switch between PSP and PS3 in-game to make the experience more interactive? As far as I can tell, the possibilities of using the PSP with the PS3 are endless.

The video game console market is a hotly contested environment that isn't nearly as easy to dominate as it once was. When Nintendo changed the way games are played, Sony and Microsoft were caught off-guard and now need to catch up. Microsoft can rely on online gaming and a lower price to bring about change and Sony has relied on a fine library of games and Blu-ray.

But as the war continues to be waged and each company in the market needs to find the single element that will appeal to gamers, Sony may have the upper hand. With the help of the PSP and its strong sales figures that will beat Sony's best estimates this year, the company is sitting on what could become its key to the future--the gateway to bigger and better things.

Think of it this way: the PSP caters to an audience that Sony may have not appealed to yet with the Playstation 3. But by making the connection between both devices much closer, kids will be asking their parents for a Playstation 3 instead of other consoles because of their desire to have the ability to enhance their overall gaming experience with both devices in-hand. And as sales rise because of the PSP, Blu-ray sales may hit a level that's far more tenable for future growth.

Sony should be commended for its ability to bring the PSP to the mainstream and become a major player in the handheld market, which Nintendo has historically dominated without fear of competition. But now that Sony has secured a foothold, the company can capitalize on its success and use it as a building block for the future.

Check out Don's Digital Home podcast, Twitter feed, and FriendFeed.

Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.

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Add a Comment (Log in or register) Showing 1 of 2 pages (37 Comments)
by pcnerd37 November 7, 2008 9:28 AM PST
I own to PSP units, one since launch day and the second since shortly after. I love the PSP and play it often. The only real problem I have ever had with the PSP is the lack of native support for homebrew and the UMDs which are constantly breaking. I run custom firmware, so homebrew isnt a real problem for me, but even the PS3 allows you to install another OS and run whatever you want. The PSP should be this open.
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by johnqh November 7, 2008 10:24 AM PST
The real challenge to PSP is not DS, it is the iPhone/iPod Touch.

iPhone has a more powerful CPU, pretty good graphics acceleration. We already see some good console type games on iPhone. The main problem with iPhone is the lack of physical buttons, which makes controlling difficult. Other than that, both Nintendo and Sony will face strong competitions from Apple, especially when developers gain experience with the iPhone SDK.
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by 7aji88 November 12, 2008 12:43 AM PST
That's what I was thinking too. The DS never had been a competitor to PSP, at least for the targeted customers who are teenagers and above (not little kids), but the new games coming out to the iPod touch look pretty darn good, and it has a better internet browser than the PSP. All what Sony needs to do is a PSP with a built in memory (it can't be that hard or expensive), a new processor (I think it's the time for a new chipset ), some major software update so it's easier for third party developers to write programs for it (SDK), and a webcam would be killer for the Skype software (I know it sounds too futuristic now),
by artistjoh November 12, 2008 2:43 AM PST
I for one am planning to buy 2 iPod Touches for my boys purely as gaming consoles. Once the console (Touch) is purchased the games are dirt cheap and it can take around 140 games on board. Because of the WiFi there are several games that are multi device/multiplayer and kids love driving cars using the accelerometer. The lack of physical buttons is not an issue as virtual buttons can be placed on the screen by the developer and can be very flexible. One game for example offers the choice of accelerometer driving, or touching the screen on the sides to turn, or a virtual steering wheel. The App Store also has a great range of games. It is strong on word games and simple arcade games, but also has a flying simulator, driving games, action, shooting and every other game category imaginable including originals that exploit the iPhone's unique feature set.

If price is the main reason for Sony to look at the PSP as a growth engine then it needs to fear the low prices on iPhone games as more and more parents like me realize that of all the portable gaming devices the iPhone/iPod Touch offer the best over all value for money combined with a fun experience for kids (and adult kids too)
by nic.disassembly November 7, 2008 10:26 AM PST
well i don't agree with connectivity being an important issue, remember the GameCube still failed when trying to bring it's GBA users to that system (which is the same argument presented here). Basically it made people feel like they HAD to buy both systems for a complete gaming experience, and that's something the competition could use against them, something Sony doesn't need right now.

HOWEVER in agreement with pcnerd37, yes, i agree Sony should stop with the homebrew lockouts and just let people go legit open source with the device. I think once you start seeing amazing games from people who are passionate about it and not just developing for a paycheck (and investing in tired genres), you'd see the PSP take off...
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by bitshiftr November 7, 2008 10:29 AM PST
As powerful as the PSP may be, Sony's target audience is not stinking rich. If I could afford a PSP I would own one, and if I could afford a Playstation 3 I would own one as well, but the fact of the matter is that the games they've put out for their system primarily target me and I'm too broke to afford either.

However, if the price points did drop and the PSP and PS3 became more realistic to their target market (either that or expect more games like Animal Crossing targeting 12 year olds), then I'd happily consider purchasing either or both. The fact of the matter is that regardless of what Sony is selling, their prices are outrageously high for the number of games they offer. I can't justify purchasing a $500 system to play Little Big Planet and Gran Turismo. It just doesn't make sense. I used to be able to get a console and buy 10 or 15 games for it (oh the good ol' days of the N64), but now everything has become so niche that there are no longer a combination of games that can captivate me.

Until Sony starts focusing on either broadening their target market to adults or children (maybe they're making an elitist console, so if you say you own a PS3 then you're automatically held in high regard, kind of like what Bugatti is doing with the wealthiest 1% eligible to purchase the vehicle), they will not win any console or handheld war.
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by Renegade Knight November 7, 2008 11:26 AM PST
I used to think there was a price difference. However when I upgraded my 360 to match what the PSP could do out of the box, the 360 cost more. It's just that you have to pay up front for the PS3. That said the PS3 doesn't live up to it's own potential either. The 360 does a better job of living up to it's more limited potential.
by cyberDJ-2038765336053745013836 November 7, 2008 10:31 AM PST
Don is thinking too small here.

The PSP should be to Sony what the iPhone/iPod Touch is to Apple.
Sony has what it takes to knock Apple off the very throne it built 20 years ago.
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by Renegade Knight November 7, 2008 11:25 AM PST
True. If Sony steps up to the plate and starts paying attention to customers. That stopped about the time they bought into the entertainment industry. Ironic.
by logictrap November 7, 2008 10:41 AM PST
I have both a PSP and PS3 and I have to say the future for Sony in this area is bleak.

In the not too distant future most consumers will be looking for an entertainment system that is essentially a full pc that runs Vista/Windows 7, games, movies, music, has a fully functional web browser, Wireless N and an HMDI interface.

Simultaneously PC games will evolve to offer full HD. Internet services such as Netflix will provide streaming HD movies & other media.

The Sony will start to collect dust like an old Nintendo 64.

Till then I'm going enjoy the heck out of the PS3's awesome game features and watch bluray movies from netflix instead of paying $4.99 per movie from Sony. It's a shame Sony can't be more competitive with their movie pricing.
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by RompStar_420 November 7, 2008 10:58 AM PST
I own the PSP and PS3. I play the PS3 much more than the PSP, not sure why, but I bought it new and it's been sitting collecting dust over the fire-place. Weird, huhh ?

Maybe because I am push 35 and games don't appeal to me any more.

I sold my Xbox 360 to a friend but I still have the original one somewhere in a box in the garage, somewhere....

LOL

If I was Sony, I would have allowed for memory upgrades to the PS3, because even Yellow Dog Linux runs, it's kinda slow......... ww.w.w.w.w.

IT can't really be taken a a serious PC alternative, because it lacks the memory to do anything besides browsing and it still don't support Flash!! web pages, which just sucks.
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by tigertee November 9, 2008 1:02 PM PST
actually they added flash support now, good to go :)
by Renegade Knight November 7, 2008 11:22 AM PST
"Maybe it's just me, but wouldn't the ability to take any game from the PS3 to the PSP and back to the PS3 be the killer feature "

That would be a nice feature. However it's going to take a second thumb stick.

Sony built a great device. I use my DS far more. Media on the PSP is a PITA. Games are ports of console games but without the ability to control the game via the controls nearly as well.

This is without a doubt the most capable and cool handheld device that I own...that I don't use. Sony needs to bring out a real Gen II and FIX the problems. Copy the DS (Yes I said COPY what works), add a second Thumbstick. Add real storage. Make the media ability work simpler, better, and less buggy (I tried to use this to listen to a book tape once but a bump in the road would jostle the PSP and skip chapters or cause other problems).

In theory you can watch media from the PS3 on the PSP but...that function is buggy, and the PS3 doesn't work with digital media all that well to begin with.

They have potential but a long ways to go to actually make their products useful enough to live up to it. I remain dissapointed.
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by d--keller November 7, 2008 11:57 AM PST
It's a half decent idea, but have you actually used the PSP? I'm thinking you haven't, or more likely, you're writing things just to write them. There are a few insurmountable obsticles to your "play PS3 games on your PSP and vice versa" idea.

1) 8.011b- the PSP's wireless can only do 11mbps. That's lame and makes PSP to PS3 connectivity pretty lame unless you're streaming MP3s. No way it could accomodate gameplay. Have you tried remote play with the PS1 titles? It looks like total crap (even for a PS1 game) and is laggy as hell. I tried playing GT2 for a week and had to give up.

2) no 2nd analog stick- There just aren't enough inputs on the PSP to keep up with 95% of PS3 games. Shooters are clunky and require special manuvers to straif. No R2, R3, L2, or L3 is enough to make most modern games almost unplayable, but only one stick is a deal breaker.

I don't know why you keep throwing this half baked crap out here. You must like all the negative attention. I guess it does provide some entertainment for me... I keep reading it to see what you'll say next.
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by benjwah November 11, 2008 12:45 AM PST
Dude, classic, I only read Reisinger's columns to see how stupid he is too!
Honest to God, I saw the headline "Why the PSP is the key to Sony's future" and thought "Oh, that's got Reisinger all over it". Sure enough, I clicked the link, and it was yet another idiotic, not-thought-through idea from the Don.
He's always good for a laugh.
by thisnamestoolong November 12, 2008 4:35 AM PST
Not to mention the obvious differences in hardware. Run PS3 games on a PSP? Sure, that would be great. I should also be able to play Crysis with all the graphics maxed on my 15 year old PC. Does this guy have any idea what he's talking about? Is he really unable to grasp the vast chasm between a the hardware of a PSP and that of a PS3? Does he understand the added cost that would bring to the development of games to scale them between the two systems (basically a whole new engine, all new textures, models, etc)? Does he realize that scaling the games thus would result in a $90+ price tag on PS3 games? Am I missing something?
by Hey_Radar November 7, 2008 12:27 PM PST
i love my PSP. I play games, I watch movies, steam music and surf the web (when traveling). It could do so much more and sell many more units if SONY just did the following: Allow UPnP DNLA support so I can watch movies and listen to music from any UPnP server (not just via Location Free or PS3). Update the browser (particular flash support) to be able to access YouTube, etc. Better Shoutcast support. This could all be done just with firmware upgrades. Hardware wise, I'd like to see touch screen support and 802.11g wireless.
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by rtcreg November 7, 2008 3:35 PM PST
Sony's success with the PSP comes almost by accident and has taken so long that it would be easy to mistake this success for a failure.
Remember, Sony wanted this to be a portable media player with it's own library of movie discs and also a music player. The serious gamers have always complained that the game selection available has never been satisfactory.
By locking up the users video choices and supplying an anemic memory, Sony destroyed their chances at competing with the iPod with Video which has ease of use and the iTunes Store going for it. Even the uses not specifically provided by Apple, i.e.using Handbrake to copy DVD's, are not all that difficult for the non-geek to use. And for a few extra dollars, the iPod media have always been playable onto TV screens(a feature of the Zune as well.).
When I see PSP users playing on the NYC subway(and the users are 100% male) their headphones are plugged into the iPod in a pocket. The PSP screen beat the iPod screen when the PSP was introduced. But now there's the iPod Touch with not just a gorgeous touch screen; but also an accelerometer and Wi-Fi with a real browser. Sony has stumbled into success with the PSP based solely upon the hardware and now the competition has closed the gap. Can Sony stop shooting themselves in the foot with the PSP?
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by drewdub November 7, 2008 5:56 PM PST
I disagree. Not that sony should abandon its PSP, but integrate its hardware into SmartPhones.


Since smart phones are just more capable that PSP's these days, Sony would benefit best from a Smart Phone and an effort to convert their "roms" to play on the new device. Sony Erickson phones that could download and play PSP games would kill the I-Phone, Zune and PSP.

PSP's are simply downscaled PS2s, not PS3s. They are very limited in GPU/CPU/RAM power, and have nothing worth noting for network connectivity.

PSP is so successful simply because of Sony's game publishing power, and the fact that everyone who owned a PS2, would be familiar, which is a large market. Not because it is more powerfull or robust than other devices.

PS2 Emulators exist for PocketPCs and Smartphones. If Sony backed one and marketed it, it would go off well. But Sony will not do that because they're greedy and will not share the spotlight even if it means happier customers and more long term profits. This was made obvious by the Lik-Sang incident. (a small hardware company made a better Input device for the ps2/3 and Sony sued)
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by drewdub November 7, 2008 6:10 PM PST
If you want your PSP to play PS3 Games (which they currently do not even come close to) Get a 5 inch LCD and glue it to the top of your PS3, cause that's how big it would have to be to work.

If the PSP was anything neer as powerful as the PS3, the PS3 Would be smaller.

The fact is, portable game systems are all one or two generations behind their console relatives, Makers ,including Sony, shrinking their previous technology to be hand-held.

A PSP that plays PS3 games will never exist, unless a PS4 Does to.
Paradoxical.

The current PSP cannot handle any of the new 3D games on xbox360 or PS3. It may look comparable on that tiny screen but that's just your eyes. The games that have PSP versions are simply that, Versions built for PSP, Very ,Very Scaled Down versions.
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by Aanon November 8, 2008 12:48 AM PST
You write these articles just so you can pay your bills, don't you? You have not analyzed any of the statements you are making, as some of the previous posters have commented.
Start working on your articles, don't just type any old crap coming into your mind when your credit card bill is due!
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by benjwah November 11, 2008 12:47 AM PST
Golden comment. I agree wholeheartedly.
by slareow November 8, 2008 8:52 PM PST
The big screen on the PSP is one of its strengths. I don't know how people can think of the video ipod as a visual media player with such a small screen. Yes it plays games but it has become a good device for playing my media. It's bigger than an ipod but it's smaller than a laptop. And I won't go blind looking at it.
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by kadiks November 9, 2008 5:24 PM PST
I think there is one thing we forgot is that the PSP released in Dec 2004 (JPN) and the PS3 in Nov 2006 (JPN). So the both device were not created to be fully compatible, contrary to the GameBoy Advance-Game Cube (2001 - 2002).
And this is the main problem, because they want to do it, but they cannot do it properly. Bugs, weak storage capacity of the PSP to support HD movies..
Also, what we forgot is that the PSP was created to compete with the DS, by bringing the "Multimedia" with a bit of music, of movies to have fun anywhere : and there was no iPodTouch which was able to compete with this big screen.

Basically, I think that Sony can win a lot by betting on the compatibility Portable-Home Console devices, but they will not do it as long as they think as a HiFi company, but as a Video game company. Like Nintendo ever does.
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by brettak81 November 10, 2008 6:01 AM PST
how in god's name would you honestly expect the PSP to run PS3 games?!???

this is a joke right?
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by benjwah November 11, 2008 12:49 AM PST
Nope, he's a frickin' idiot. Unqualifed and in over his head.
by sting7k November 10, 2008 6:18 AM PST
I don't see how you can play a game on the PS3 and then go and play it on the PSP. PSP games barely look PS2 caliber and you want to play PS3 games on it? The iPhone is more powerful I think thank the PSP even. Next, PS3 games are made for HD on the big screen. I don't know anyone that would want to give up a comfortable couch with a big TV and surround sound for a 4.5"(?) LCD screen and a headset, I mean come on.

I say Sony can turn the PSP into an all-in-one device. It can't be phone exactly, but it can be an MP3 player, internet browser, game player, PDA, protable video player. They could allow you to transfer videos from the PSN store to the PSP (if they don't already) to make downloading more attractive.

There's just one problem with all of that really. People who have a PSP more than likely already also own an iPod or even an iPhone now. I don't think Sony realizes what they have missed out on by only billing the PSP as a game device. It may already be too late with iPhones flying off the shelves and the DS also still posting huge numbers.
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by LogicProphet November 10, 2008 6:34 AM PST
The popularity of the PSP stems from the fact that its hackable. Being this the case Sony is always scrambling to lock out those back doors rather then improving the actual gamer experince. It took them 3 years later to incorporate skype then the homebrew community. So I agree with everyone that mentioned that they should cut the crap with the lockouts and let the damn thing be open source. IMO the improvements needed are :

1. Lower the price of the games and the console. high price range has been the down fall of several consoles
2. Include an HDMI cable damn it >_< how can you make a consumer drop so much dough on a product and not include the element that will make this thing rock!
3. The PSN store has got to cut the BS and really negotiate with thier companys. I want to see all my psone classics on there as downloadable content for my psp.This would go well with an implimented community homebrew segment that everyone can download the content created.
4. real connectivity btw the psp and the ps3 I do want to sometimes play my psp on my TV ( I have the old fat psp so I don't have any real way of doing that without gutting the system) since its a USB interphase come on you made me fork over the money early on give me an alternative atleast.
5.PSP has to look at the itouch and take what makes it good. touch screen, virtual keyboard, real IMing, ect
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by ModerateBlues November 10, 2008 7:00 AM PST
Why is Don Reisinger always so angry. Every entry he makes is done with a tone of voice that reminds me of a 20 year old who thinks he knows the world and uses curse words in fear of his point not being noticed or taken seariously.

I enjoy his articles for their content, it is just his presentation and arrogant tone of voice of a "Mr. Know-it-all" that drives me crazy.

Maybee one day when he is older and wiser he will perhaps smile in his picture, and understand that a quiet demeanor and artfull presentation of facts will do more to inform and persuade than to practically strut across the page as if he is the greatest pundant on earth.
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About The Digital Home

Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.

Don writes product reviews for InformationWeek and is a regular contributor to Processor Magazine. You can visit his personal site at DonReisinger.com or if you would like to email Don with questions or comments, drop him a line at CNETDigitalHome@gmail.com. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.

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