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To PSPhone or not to PSPhone (Sony versus Apple)

It’s been five years since the release of the Sony PSP in North America. It'll be six years come March, 24 2011. There have been 3 hardware revisions since the release of the handheld and most of have been for the better. One can argue that the PSPGo is more about evolution than revision and its a different type of PSP for a portion of the hand-held consumer base that would like a download only device.

What are the next steps for Sony and the PSP? In a nutshell, there are two paths Sony can take. I would like to define these paths by referencing their main competitors. Let's be realistic, Apple and Nintendo have their business plans established and in the process of execution. Path A is the route of Apple with an iPhone-like device. Path B is the route of Nintendo where the focus is gaming only and evolving on the DS. The focus of this blog is to dissect both paths and come to conclusion on the right direction for Sony without looking at an ROI, revenue projections, or other types of statistical analysis. I'll shoot from the hip, trust my instincts, keep it real ... you get the point. I would like to disclose the fact that I have both a iPhone and a DS and both are regularly used.

I work for a company who's motto is "where technology and trading converge". I get the concept of bringing together a multitude of various core technologies. Apple has done a fantastic job of converging these technologies and topping it off with a proven digital distribution model and customer service. There is a reason why financial analysts, who are bearish on tech stocks right now would like to hedge their bets by going long AAPL (Apple). Apple is still a solid stock and a solid company. Their iPhone is arguably a solid product.

What makes the iPhone successful as a tech product? Forget the marketing muscle for a minute and just focus on the product usage. Although I carry my DS and PSP in my murse (man purse) and I'm not ashamed to admit it, I can't carry it everywhere. Just like the crackberry for work purposes, my iPhone is attached to the hip. It has evolved from just a tech product to something that is heavily relied on for your daily routines.

How can Sony emulate this formula and in some ways exceed it? Above all, the product needs to be a communication device. PlayStation has been synonymous with gaming. Gaming, however, is not something you do all day. As a communication device, I need to make phone calls, send texts, tweet, facebook message, etc. The theory is that I should be able to game easier if my one stop device does everything else. Fight a round of Super Street Fighter IV, incoming call -> game auto-pauses, resumes when call is over, win round 2, message my brother who I was fighting against and gloat. The PSPhone would be a communication device that I can game on, not a gaming device that I can communicate with. PSP as a communication device will get non gamers to buy the product.

The PlayStation Store at this stage in its maturity is a satisfactory digital distribution portal. Obviously not on the scale of the AppStore or iTunes but it does the job. Sony will have to widen the types of applications that can be downloaded on the store. This includes some of the free/paid for apps that are offered on the Apple App Store (Netflix, Banking Apps, Google Maps, etc).

Store accessibility is key. PSP does offer up WiFi but to be able to download items through a cellular network has been key to iPhone's success. I'd be interested in the statistic of applications/songs downloaded while stuck on bus during the morning and evening commute. With 4G coming down the pipe for most networks, it makes sense for Sony to partner with various networks and really dig into the Apple iPhone marketplace with support from Verizon, Sprint, etc. Unfortunately (in the US), network providers have started to cap bandwidth monthly. Fortunately, there is a Starbucks in every corner so the frequency of free hot spots is a welcome (at least in NYC).

Now that we've established the next PSP as a communication device and discussed briefly the App Store versus the PSN Store, how can Sony overshadow Apple and behemoth called iPhone? First, let's not forget that Sony has a very important advantage over Apple. Franchises. As a hand-held gaming device, only Nintendo can compete with Sony on a franchise level. This important advantage is what will get core gamers to buy a PSPhone. God of War, Little Big Planet, Socom, Rachet and Clank, Resistance, Jak and Daxter, inFamous, and of course Uncharted to name a few. Apple has ... Angry Birds (maybe)?

Games on the PSP look for the most part better than Apple iPhone games but looks aren't everything. As evidence by the Kinect versus PS Move wars, buttons are important to core gamers. Might not be important for non gamers, but for me I have a hard time playing Street Fighter on the iPhone for obvious reasons. How many times can I throw a fireball instead of wanting to hit a Dragon Punch and getting kicked in the face by a jumping opponent. Likewise, its alot more fun to play games designed for a touch screen than ported over with button layouts (iPhone mini games versus PSP minis). Why can't I have the best of both worlds. Sony, please pay attention and DO NOT go completely touch screen.

Six degrees of freedom in a 3 dimensional space not controlled by buttons but through motion. I believe that touch and motion are logical next steps for the PSP. In addition to these, 3D is something Sony is very much pushing as the next technology agenda. Nintendo beat them to the punch with 3DS. Sony can improve on what they are doing. This might make the product a bit more expensive but a portion of the price can be absorbed by signing up with Verizon, AT&T, or Sprint. How many people buy an iPhone at full price?

Alright, I think I wrote a bit too much but I had to get it off my mind and down for you guys to comment. I'm sure you have your own concepts of what the next PSP will be. I didn't even comment on Android OS versus Sony sticking with their own OS/XMB. I'm still doing my research on Android so maybe you guys have opinions on that.

My next blog will go into Sony versus Nintendo if the approach is to keep it strictly a gaming device. Hard to imagine that they keep this path as they've been destroyed by Nintendo commercially despite both systems being heavily pirated.


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