2007 the Best Year Yet For PSP & DS

ElFozzie writes "From a handheld perspective, Pocket Gamer has posted a couple of features offering a positive viewpoint on the reasons why both PSP and DS might have a very happy new year. Tellingly, whilst the PSP piece focuses on a range of new potential developments from new peripherals and downloadable video content to price drops and even a new version of the handheld system, the DS article simply highlights 10 top games titles due to hit the streets in the next 12 months. On one level this could be argued as a reflection of the divergent strategies of the two devices and companies, with Sony trying to establish all-singing, all-dancing, all movie-music-and-gaming 'entertainment platforms', whereas Nintendo have focused solidly upon one core area. However a simpler argument would suggest it's merely underlining why Nintendo has raced ahead this year and the lesson Sony are going to have to learn if they are to have any chance of a truly prosperous 2007 — "It's about the games stupid!""

Comments

It's interesting

[seebs]

I picked up a PS3 (for Linux) and I've been hanging out with PS3 users. It's fascinating. They have no idea about content restrictions. When I posted a comment on my blog about how annoying HDCP is (if I didn't have it, I'd be running my PS3 at 1920x1200... But it's impossible in my setup because of HDCP), I got a bitchy remark from someone who insisted that Linux has full access to the hard drive, and just doesn't read the PS3 filesystem. No, Sony actually virtualizes the machine so you see only the part of the disk that doesn't have any Sony data on it.

The war between Sony's content and hardware people is pretty vivid here.

Re:it's certainly ironic

[justchris]

That's not really true. If the PS2 did make a loss initially, it was very small, and was only for the first couple of months.

Contrary to popular belief, what Microsoft did, and what Sony is doing now is not standard in the industry. Especially in the case of the original Xbox, which was never profitable on the hardware, which is why Microsoft killed it so quickly and thoroughly. The reason is, unlike every other company, Microsoft purchased the parts wholesale and put them together into the Xbox case. All other consoles (including the 360), the company contracted to fabricate the parts themselves, so basically they pay a license fee to the original developer of the hardware, but they build and combine the hardware in their own fabrication plants. That's why there are usually hardware shortages when a system initially launches, because the company has to either open up, or convert, fabrication plants, and get them up to speed.

Because they're actually building the hardware themselves, instead of just buying it prebuilt, when the cost to build the hardware is reduced, the company saves money. In the case of the original Xbox, when the cost to produce the hardware was reduced, it wasn't Microsoft who was making more money. They were still paying the same amount per chip to Intel & Nvidia, even though the chips became cheaper to make.

Microsoft learned their lesson, and the 360 is both designed and constructed much more like a home console gaming machine than the original Xbox, which was basically a miniature pc sold for about half the price an equivalent pc would cost.

Also, while hardware does produce more revenue than software, software produces more profit. There is a reason that Nintendo is the most profitable of the console makers, and always has been. They concentrate on software, so have the smallest revenue of all, but still end up with the greatest profit.