PSP Opens to Record Sales in UK

Sony's (NYSE: SNE) PlayStation Portable (PSP), which the electronics and entertainment company hopes can rescue it from financial doldrums, staged a record-breaking launch in the United Kingdom, shattering existing sales records as gamers scooped up the console and compatible games as soon as they became available.

According to Chart-Track, which uses electronic data from point of sale systems to track sales , 185,000 PSP units were sold between Friday and Monday in the UK, netting some US$60 million in hardware sales alone for Sony.

Going, Going, Gone

Gamers also sought out software to run on the handheld device, pushing 20 of 24 titles launched along with the console into the top 40. Nine of the top 10 slots on the sales charts were taken up by PSP game titles.

PSP sales far exceeded the previous high-water mark for game launches. The Nintendo DS had sold some 87,000 units on its launch weekend.

Sony is positioning the PSP, which debuted in the U.S. in March, as far more than a game player, having opened the technical format to allow publishers to create DVDs of movies and compatible music files. The console can also be used as a wireless Web connection.

Its main competitors include the Nintento DS and the nGage from Nokia, which like the PSP is being billed as a handful of devices in one.

High Hopes

The European sales launch is a contrast to the U.S. debut of PSP. While units sold out quickly in Sony's home country of Japan -- some 200,000 units were sold in a single day there -- sales in the U.S. were more modest out of the gate.

Some analysts say that is a function of the marketing approach. Sony has positioned the PSP as a grown-up version of other gaming devices and has even begun to work on ways to make it a more versatile tool, possibly adding a mobile phone feature to future versions.

Jupiter Research analyst Ian Fogg said the numbers are especially impressive given that the launch came with little advertising or marketing efforts behind it in the UK.

But he said it's too early to declare Sony this year's big game console winner. "These are very early days," he added. "Sony's success must be judged on PSP sales over the entire Christmas run up, as well as how the vital games sold per console ratios develop."

Sony has said that it hopes to sell 1 million PSP units in Europe before Christmas.

Indeed, the games and other software for the players are where many companies expect to reap the profitable rewards of their gaming dominance. Though the PSP sells for around $250 in the UK, Sony and others are willing to sell the machines for tiny profits in order to help ensure recurring revenue as new game titles are released over time.

Convergence Ahead

Analysts say the success of PSP likely heralds a future in which handheld devices abound that offer both entertainment and productivity functions in one unit. While smartphone makers are believed to have an upper hand in that market, some say game makers may be able to lock in younger customers.

Parks Associate analyst Michael Cai said one of the attractions of the PSP is its relatively low sticker price. While fully loaded smartphones can run $500 or more, the PSP may be inexpensive enough to attract new users to give it a test run.

"As a gaming device, it will likely be successful for Sony, " Cai said. "The bigger question, of what the future holds for it as a multi-purpose device -- that will take longer to answer."