How Sony lost the handheld war

Simon looks back through the mists of time to see how Sony's PlayStation brand got it so wrong when it came to handheld gaming

The Sony PSP. A hit, but perhaps not a big enough hit?

It never ceases to amaze me just how quickly things can turn around. Back when Sony confirmed that it was looking to introduce a portable version of its PlayStation console, speculation was rife that Nintendo was on the verge of following Sega and becoming exclusively a software producer. After all, the PlayStation 2 and Xbox had soundly beaten the GameCube, and the one area where Nintendo had ruled the roost for the decade before – the handheld segment – was about to get serious competition from arguably the most potent brand in gaming at the time: the PlayStation.

And yet the battle between what would become the Sony PSP and Nintendo’s DS handheld machine has epitomised much of what’s happened in the console marketplace since.

At the launch of the PSP, things were looking promising for Sony. Many were bowled over by the technical marvel that they held in their hands, and the PSP got an enthusiastic response from reviewers and early adopters. The sheer amount of technological power it had managed to pack in was extraordinary at the time, and while the controls weren’t quite as comfortable as we were used to, the machine nonetheless impressed. Never mind that there weren’t any particularly compelling games at the point of launch: surely they’d be following a little further down the line.

When the machine launched in Japan back in December 2004, over 200,000 were shifted on day one. Sony, it seemed, had struck gold again. And while the subsequently stilted worldwide roll-out did the firm no favours (leaving some territories waiting nearly a year for the machine as a result of stock problems), the early signs were good for Sony, especially when 185,000 machines were sold in the UK on its first day, easily eclipsing the sales Nintendo had enjoyed for the DS on its day of release.

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But the release of the DS would be the moment when Nintendo’s strategy – which can be traced back to the GameBoy and GameCube – of compromising technological specs in favour of lower cost machines with more interesting games would pay major dividends, and turn the console war on its head.

The DS launched in America ahead of Japan, in November of 2004, with the European roll-out following in March. It had two tricks up its sleeve that would prove crucial in the years ahead. Firstly, it had two screens. But secondly, and more importantly, it could be interacted with via a stylus thanks to one of the displays being a touchscreen. In many ways, Sony never saw it coming.

For despite a slower start for Nintendo’s machine, it simply had far more software ammunition up its sleeve. Sony’s PSP was the more expensive machine, which gave Nintendo an advantage, but it was also lacking in distinctive, interesting titles for it. There was a fair choice, to be fair, but there was a distinct air of shovelware, with games shoehorned across from the bigger PlayStations without really being optimised effectively for the PSP. Wipeout Pure worked, as did Ridge Racer, but a great number of releases, particularly in its first year, underwhelmed. In fact, only Lumines really felt like a game that was specifically put together with a handheld in mind.

Switch to the DS, and it was a very different story. 2005 alone saw Mario Kart DS, Castlevania, the wonderful Advance Wars and Animal Crossing appear, and it seemed that Nintendo always had another hit around the corner. Things ratcheted up further with the launch of Nintendogs, the DS virtual pet craze that sent console sales soaring.

But there was more around the corner. Metal Gear Solid and Tekken would make it onto the PSP in 2006, but by then, Nintendo was well into the world of Brain Training. To call Brain Training a phenomenon would demonstrate a real penchant for understatement: with savvy marketing that would accentuate the natural interface, and targeting a demographic well above the teens, the game sold by the truckload. More Brain Training, Big Brain Academy, Sight Training and more have followed, and Nintendo has struggled to keep up with supply for its hardware ever since as a result.

And then there’s the PSP. Word surrounding the PSP was of dissatisfaction, especially so when the UMD movie format proved to be a flop. UMDs, in the grand masterplan, would prove to be a way to watch your favourite films on the move by buying them again. The only problem was that the retail price was the same as that of a DVD, and you didn’t get the extras either. In spite of a couple of early sales successes, UMD support was quietly withdrawn by the majority of movie studios in the months that followed.

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The games, too, weren’t delivering as expected, although – in spite of what some may tell you – there were several solid titles in there. Final Fantasy Tactics, Daxtor, LocoRoco and Ratchet and Clank: Size Matters all are well worth picking up, and sales of the machine were ticking along as a result. The problem was that Sony was being soundly beaten, simply by being outthought by a rival that many assumed were in for a sound beating.

To call the PSP a failure would be incorrect, of course. Over 30m have been sold, and while many retailers were talking about lack of Nintendo stock in the last year or so, the PSP has been quietly shifting. This year too has seen arguably its best game, God Of War, as well as the delightful Patapon. Yet Nintendo’s DS has now outsold the PSP by well over two to one, and its software library continues to be the more interesting. Even something like Cooking Mama 2, which may not be a terrific game, is ideally suited to handhelds, and simply couldn’t work on the PSP due to the conventional interface that Sony’s machine has to work with.

Sony’s major problem now, and it’s unlikely to be a resolvable one, is that third party developers now know that the installed userbase for the DS is far in excess of the PSP’s, and Nintendo is, bluntly, where the money is. The latest major blow for the PSP, while unlikely to be a fatal one, is undoubtedly a major hit. And that’s that developer Ready At Dawn, who had just finished God Of War: Chains Of Olympus (and had produced Daxter, the machine’s biggest hit to date), would no longer be making games for the PSP. As the team widely renowned for having made the best of the PSP, this is a real hammer blow for Sony.

To add fuel to the fire, UbiSoft UK managing director criticised Sony and the PSP in an interview with Cooper confirmed that UbiSoft had no PSP titles in the works for 2008 (and it seems to have around 15 DS releases lined up), and commented “I think that Sony is disappointed with sales and it’s unsure as to which way to take it”. He went on to say “we still see it as a viable format. But we’re not developing too many games on it until we get some direction”.

Yet the PSP is topping the console hardware charts in Japan, and the God Of War pack heading to US retail is expected to inject further life into the machine’s sales (where, in May, 182,300 PSPs were sold, against 452,500 DS machines). But where’s the next hit coming from, and the next boost? That seems to be the major problem. A couple of good exclusives are lined up between now and the end of the year (such as Secret Agent Clank, LocoRoco 2 and Buzz), but there are no more than a couple of dozen titles, most of those multi-format, that we’ll be seeing before Christmas. The DS seems to have around four times as many titles planned, including Guitar Hero and Pokemon. And while there’s a lot of bandwagon-jumping and shovelware in there too, there’s little doubt where publishers feel the momentum is.

Sony is rumoured to be working on a PSP 2, and it certainly won’t want to waste what it’s learned over the past few years of competing in the handheld market. But it’s fair to say that it probably expected an easier ride after the success of the first two PlayStations, and it simply hasn’t got it. It delivered a machine that, in retrospect, is a conventional console crammed into a smaller chassis, and has paid the price for not coming up with something more suitable for the handheld market. And while it’s still an impressive piece of hardware, if it does press ahead with the PSP 2, you can’t help but think that a radical shift in thinking needs to take place.

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Because right now, as every week passes, Nintendo’s grip on the handheld market is getting tighter and tighter. It’s delivered a well-priced, interesting product. It’s marketing it brilliantly. And it consistently ensures that there are plenty of games to keep us entertained. It’s why, right now, it’s the opponent everyone wants to beat in the videogame arena, but nobody is anywhere near touching. Not least Sony…