Sony’s PSP

The Economist writes on Sony’s launch of its Playstation Portable (PSP):

Sony correctly identified a PlayStation generation that had grown up with gaming and wanted to keep playing beyond their teens. This hugely boosted the market, since older gamers (today, the average age of a console owner is around 28) have more disposable income. Now, having shown that gaming on fixed consoles (which plug into televisions) is not just for kids, Sony hopes to do the same for portable gaming, with the launch in Japan on December 12th of the PlayStation Portable, or PSP, a hand-held gaming device.

Once again, it is attacking a market dominated by Nintendo, which has sold over 150m of its Game Boy hand-helds since 1989 and still has a market share of over 90% in the hand-held market, despite having lost control of the fixed-console market to Sony. And once again there is a clear opportunity to expand the market, since most games available for the Game Boy are developed by Nintendo itself and have little appeal to anyone over 16.

That is why Sony’s PSP is aimed at older gamers, aged 18-34. Its range of games is more varied and sophisticated than the Game Boy’s, thanks to Sony’s established relationships with game developers. It can double as a music and video player, and Sony has hinted at future phone and camera attachments too. This versatility should make the PSP more appealing to older users, says Nick Gibson of Games Investor, a consultancy. Moreover, he notes, the price (19,800, or around $190) is low enough to be within the reach of younger gamersthe result, claims Sony, of making many of the PSP’s parts itself. By pitching the PSP at a demographic between the Game Boy and the PlayStation, Sony is hoping both to steal market share from Nintendo and attract older users.

By introducing competition and exploiting its close existing relationships with developers, Sony is hoping to make the hand-held market more closely resemble the fixed-console market, which it dominates.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.