Following four months of speculation, Sony (NYSE: SNE ) appears to be ready to
formally announce the PlayStation Portable 2 handheld game device. Online news
outlets VG247 and MCV reported Wednesday that the company will hold a business
overview and strategy meeting in Tokyo on Jan. 27 to cover the formal
announcement. While Sony hasnt officially confirmed the date of the meeting,
these reports come just two-and-a-half weeks after Sony Computer Entertainment
President Kaz Hirai (rumored to be taking over as Sony CEO in 2011) discussed
the handheld gaming device in an article published by The New York Times . Hirai
said his company had been planning its latest devoted portable gaming device
since the day the first PlayStation Portable was released in 2004. The first PSP
was billed as a portable game player, but also represented one of the first
mainstream efforts to build an overall media device. It supported both
downloadable movies, MP3 playback, and home videos sold on Sonys proprietary
disc media (the failed UMD format). This attempt to meld game, movie, and music
entertainment on a single platform came three years before Apple (NASDAQ: AAPL )
successfully did it on two platforms, the iPod Touch and iPhone. Its into that
market fostered by Apples success, where smartphones running on Microsofts
(NASDAQ: MSFT ) Windows Phone 7, Googles (NASDAQ: GOOG ) Android, Research in
Motions (NASDAQ: RIMM ) BlackBerry OS platforms and many others all run games in
addition to multimedia capabilities. Sony also is facing a portable gaming
market that has changed dramatically over the past two years, where consumers
expect 99-cent casual fare rather the $40, graphics-intensive games typical of
the average PSP title. High-end graphics and immersion appear to still be Sonys
focus with its portable gaming strategy, but high-end technology failed to help
Sony topple Nintendos (PINK: NTDOY ) Nintendo DS handheld device over the past
six years. Nintendo, meanwhile, is releasing its own new portable gaming machine
this spring, the Nintendo 3DS. The device is similar in form to the current
Nintendo but sports greatly improved graphics comparable (and reportedly better
than in some cases) to those seen in high-end iPad games like Epic Games
recently released Infinity Blade . The 3DS real hook, however, is that the
device is capable of displaying stereoscopic 3D images without the need for
special glasses. Sonys PSP2 is rumored to feature graphical output comparable to
whats seen on high-definition home consoles like Microsofts Xbox 360, but its
questionable whether that will be enough to woo consumers away from alternatives
like the iPod Touch and the brand loyalty that come attendant with almost all
Nintendo hardware releases. Both Nintendo and Sonys new gaming devices will face
an uphill battle when theyre released later this year. While hardware sales for
both the Nintendo DS and PSP have remained brisk these past six years, software
sales have steadily declined as Apples handheld devices have gained in
popularity as gaming hardware. Nintendo has already committed to cartridge-based
physical media as the Nintendo 3DS software format of choice, and Sony has
indicated that the PSP2 will also support some kind of physical media, if not
the original PSPs UMD format. Are consumers willing to buy boxed portable game
software at brick-and-mortar retail stores in 2011? Well know more in the first
half of this year. As of this writing, Anthony John Agnello did not own a
position in any of the stocks named here.
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