The PSP Is on the Rebound

Call it a PSP comeback!

In a story from Home Media Magazine, ever since the PlayStation Portable (PSP) dropped its price "from $200 to $170, hardware sales on the PlayStation Portable, which plays UMDs (Universal Media Discs), are up 40%."

"The story on UMD is that we didn't do a very good job at launch with articulating what consumer we were going after," stated Peter Dille, SVP of Marketing for Sony. "The studio said 'here's a new format.' And that triggers a bunch of things in the Hollywood pipeline that really didn't make sense for PSP. Shame on us, because we didn't explain we were aiming at 18- to 34-year-old males. We're looking more for Jackass-type movie content. There was a proliferation of UMD movies that didn't make much sense, and they backed up at retail."

With Target coming back into the fold as a supporter, Dille feels that all the PSP's ills are in the past.

"We have a much better dialogue with Hollywood, and they understand what we're doing," he offers. "We're talking to some of the studios for deals where we'll do the distribution ourselves. We want the content out, and the Hollywood studios want to get the content out. So we're telling them, 'if you're worried about managing the business yourself, let us handle it for you. We'll manage it under the PlayStation umbrella.' They're excited about that, and we think that's a pretty neat way to go as well."

In addition to this he went on to say, "There's a bright future for non-game content on PSP, some of which will be available via its own download service later this year."

Also, "the entertainment download systems for PSP will be different than the PS3 digital distribution pipeline. He said, ideally, both download services will be announced and explained at the same time."

Some people feel that when the PSP first came out the cost for UMDs and games was simply too high for consumers to pay.

"UMD movies should be $10; games should be $20," states Billy Pidgeon, a video game analyst at IDC. "But I understand that it costs a lot of money to develop a PSP game, so that's what that $40 price is paying for."

It is expected that Sony will bring out a new PSP later in the year. The goal is that it will utilize the new "download service." Also, some believe that this "new PSP will come equipped with a hard drive to let consumers download music, movies and TV shows directly to the system. The current PSP requires Sony memory sticks to watch downloaded content."

James McQuivey, an analyst from Forrester Research, feels "that one reason Sony may be taking so long with its digital distribution store is because it might be viewed as a failure of its UMD format."

"Sony hasn't won a format war ever," McQuivey states. "Sony can't get over the idea of controlling the media format. This problem of Sony's goes back to the Betamax. They don't just want to make the device that everybody wants. They want to own the entire format."

The bottom line is that working with Sony's memory stick isn't easy in regards to putting your downloaded media on it. One can't just export a file and drop it on the stick. Its got to be special file that only the PSP can read.

"So you don't have the same robust market that you could have had if Sony said, 'We're going to open this up. You can put your Windows Media files on here. You can put your QuickTime files on here,'" McQuivey says.

On the bright side, Peter Dille "said announcements will be made soon regarding UMD movies."