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Sony PSP Sales Get Off to Lackluster Start

By Jay Lyman
Apr 5, 2005 12:03 PM PT

Japanese electronics giant Sony readied for its U.S. launch of the handheld, multimedia PlayStation Portable with hopes for the same type of fast sellout the new gaming and entertainment device had in Japan. However, there are still PSPs on store shelves after nearly two weeks since the U.S. game was released.

Sony PSP Sales Get Off to Lackluster Start

While would-be buyers of the new device -- aimed at a slightly older demographic with its gaming and music and movie capabilities -- may not have lined up as deep as Sony had hoped, the US$250 gadget is winning praise for its console-quality graphics and compelling, mobile game play. Despite some criticism, mainly for lack of hard drive and battery life, industry analysts said the PSP will likely do well in the long run, particularly considering add-ons and new games for the handheld.

"Sony may have overestimated the initial reaction, but that's not a reflection of the long-term health of the PSP," In-Stat senior analyst Brian O'Rourke told TechNewsWorld. "The PSP will be fine."

On Store Shelves Now

Sony, which saw the PSP devoured by the Japanese market with sales of 200,000 units on the day of its launch last December, said it planned a million units for the U.S. launch. Sony also indicated it would bump up production of U.S.-bound PSPs to two million units per month by midyear.

However, despite some late-night lines for the first PSPs, Americans did not clean off store shelves as their Japanese counterparts had, and there is agreement in the industry that Sony may have over-billed the U.S. launch.

"I don't think there's any question that it hasn't gone as well as Sony expected," O'Rourke said. "They expected to sell out sooner."

Nevertheless, the analyst indicated the U.S. is a much different market than Japan, where price is more of a priority and consumers are less likely to be early adopters. O'Rourke added that while Sony is a big electronics name in the U.S., the brand is even bigger in its home nation.

Praise and Criticism

For those in the U.S. who have purchased the PSP, and for reviewers, there has been both praise and criticism heaped on the portable gaming and multimedia device.

"Of course, everybody's saying, 'Where is the hard drive?'" O'Rourke said, explaining that Sony is simultaneously promoting the recently opened Universal Media Disc (UMD) format.

Other criticism of the PSP has centered on the battery life, which is put to the test by PSP gaming. O'Rourke added that the use of Sony's traditional X, circle and square makes controlling the device somewhat less intuitive.

On the other hand, O'Rourke praised PSP's mainstay of portable gaming, echoing the thoughts of other analysts and reviewers who have been impressed with the graphics and play of the device, which both reportedly match the quality of stationary consoles.

Impressive Features

Parks Associates analyst Michael Cai told TechNewsWorld the PSP has been well-received based on its screen resolution and additional features.

Cai said the additional music, movie and other capabilities allow Sony to target a more mature and profitable demographic. He also indicated that although PSP's hybrid capabilities make its future uncertain, the device should appeal to a wide audience in the U.S.

"If they can keep the price point low and keep adding on features, I don't see why consumers wouldn't like it," he said.

In-Stat's O-Rourke said PSP's $250 price tag -- around $100 more than the competing DS from Nintendo -- may be part of the reason the U.S. launch was less than anticipated by Sony.

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