Editor's note: This is a compilation, mostly written in March so keep that in mind when reading.Welcome to the Market Dissection of the Playstation Portable Gaming System. This would actually be this particular feature's second appearance on Gamenikki.com. I originally created this piece for the blog, intending it as a one or two page glance at the positioning of the PSP in the market place. That two page blog blossomed into a full 7 pages of writing, each entry getting longer as I tried to cram in more data. The end result is that I feel the blog postings are unreadable under the current blog system, and as Frank found out when it was noticed I scooped Variety, linking to the blog forces you to read all the entries. Not exactly an expedient way to view a particular post, and not well suited to seven posts either. Also note that these articles were completed before Nintendo revealed the DS-Lite, so no, it's not your imagination that I ignore it's existence.
So here it is, again, my take on the Playstation Portable at the end of 2005.
Tech Talk : A million here, a million there, and soon you have real sales.Sony went on record to its manufacturing partners stating that they (Sony) planned to ship 20 million PSP units by the end of 2006. On the surface this does not seem that abnormal. It would seem like a smart business move to inform manufacturing partners of your product intents for each year. However, in the case of Sony, what may seem to be a normal procedure is worrisome, especially considering the history of Sony.
To put this into perspective,
Nintendo sold over 13.5 million Nintendo DS units in the year 2005. At this point
Nintendo is running out of stock of that handheld unit with rumors
raging that a newer, slimmer, DS is on the way. Some, such as myself, are betting that we'll see a new DS launch with Metroid Prime Hunters in March, while others are betting that a new design for the
DS could launch as early as February. Now, with the stronger DS lineup coming along, it's almost a no brainer that DS sales will increase as the year goes on. Add in a possible newer model and a potential price drop on the existing model in March,
or any time in 2006 for that matter, and it would be safe to presume that Nintendo would easily match the number of DS units sold in 2005. That would be over 27 million units sold and shipped by the end of 2006.
Now, imagine for a second Nintendo telling its manufacturing partners that they only intend to ship 25 million units of DS by the end of 2006. The logical conclusion is that there is no expectation that the handheld will sell as well in the second year.
That is what Sony has done with the PSP. Sony shipped over 10 million units in 2005, but sold much less than that. Sony, has in fact, by limiting the number of expected units at 20 million, has told manufactures that it does not intend to even build the same amount of Playstation Portable devices in 2005 that it did in 2006. And unlike the DS, there are no words of a redesign emanating from within Sony, nor any indications of a PSP redesign from the normal rumor mills.
The question is why? Why would Sony not expect to sell as many PSP units in 2006 as it did in 2005? We'll get to that later, but for now, let's take a look at another piece of the puzzle.
At this time there is no doubt about the domination of the PS1 and the PS2 in the gaming world. The PS1 is by far the world's most popular console, ever, and the PS2 is by far the most popular of the current generation consoles. It was not always like that though. During the late 1990's Sony was actually known to pull many tricks in order to make the sales of the Playstation appear to be better than sales of competing consoles, such as the Nintendo 64. Sony was known for counting consoles returned for repairs and shipped back out as new consoles. Another one of the tactics used back then is that Sony would list the number of Playstation units shipped out as the number of units... um. Well, the number of units sold.
Sounds suddenly familiar doesn't it? Sony didn't sell 10 million plus PSP units, but they did ship that many. Now, what I want to ask, is what the average user going to think when they browse through press listings or blurbs on a news site. Those are such big numbers being tossed about, and the idea of "a million anything" to an average web page browser is indeed a lot. What exactly looks more competitive? 9 million plus handhelds sold versus 13.5 million handhelds sold, or 10 million plus handhelds versus 13.5 million handhelds.
The answer, I think, is obvious. Nobody really lies, nobody tells something false, and the facts are presented, but not in a way that allows the average user to correctly follow the facts and draw the correct conclusions.
The next question then is this: Why does Sony not expect to sell as many PSP units in 2006 as they did in 2005. After all, the Playstation 3 is supposed to launch this year and is going to interact with the PSP in a more useful fashion than the Gamecube interacted with the Gameboy Advance. The price of the location free player will probably drop, and UMD movies are certainly supposed to be a hot seller if pop-culture stars are to be believed....
So, why would Sony be telling its manufacturing partners that it is going to build less units in 2006, and with no word of a second edition to replace the current model? I think there are several different issues behind this.