Sony’s new strategy for portable gaming?

As you may know, a press event titled “PlayStation Meeting 2011″ was held by Sony today in Tokyo. Recent speculations suggested that Sony would either announce a new generation of their portable gaming console called PSP2 or the long rumored (and even massively leaked) gaming smartphone “PlayStation Phone” (which almost certainly will be called Sony Ericsson Xperia Play) or even both. Sony really did announce the new PSP, codenamed the next generation portable (NGP), but it wasn’t not the most important announcement of the event. The single most important announcement of this press event was Sony’s new strategy for portable gaming, which i like to touch in this post.

PlayStation Certified devices - Sony's new strategy for portable gaming?

PlayStation Certified devices - Sony's new strategy for portable gaming?

The cross-platform PlayStation ecosystem

Aside from the new PSP, Sony announced the so called “PlayStation Suite” framework for mobile gaming, which should be the center of gaming not only for their new portable gaming console, but also for other third-party Android devices (smartphones and tablets), enabling cross-platform “hardware-neutral” game development for various devices. Sony’ll cooperate with other manufacturers so that devices that are not made by Sony (say a HTC Desire HD smartphone) will go thru a certification process and get a “PlayStation Certified” tag, if they are good enough by Sony’s standards. Certified devices will get access to a special “PlayStation Store”, where users could purchase games. All this potentially establishes a new PlayStation ecosystem, with it’s own developers, games and market for them, that’s available on a large number of devices made by different manufacturers, but still controlled by Sony, which will make profit from it.

Now it’s obvious that this initiative will affect the upcoming “PlayStation Phone” from Sony Ericsson, effectively being the first “PlayStation Certified” handset, but the real question here is does Sony really wants to cooperate with other third-party manufacturers? If not, then all this is just made to enable PlayStation gaming on future Sony Ericsson handsets without releasing those phones under the “PlayStation Phone” brand. But this scenario is highly unlikely.

Being the Microsoft of portable gaming

The most likely scenario is that some time ago Sony realized that the portable gaming market is being pressured by the super fast growing smartphone market (and even the tablet market, as shown us by Apple). More and more people buy smartphones, that are used by them as multipurpose multimedia and communication devices, which includes gaming on the go. You can even say that in the long run dedicated portable gaming consoles are “dead”. Not wanting to lose this market, Sony looks for options, but acknowledges that it can’t compete with all the smartphone manufacturers and as the old saying goes, “if you can’t beat them, join them” and not only join, but control them. How? By owning the ecosystem.

Steve Jobs trolling competitors back in 2009

Steve Jobs trolling competitors back in 2009

This might be a bad analogy, but try to remember the “platform wars” from the earlier days of the PC market. The two main sides were Apple & Microsoft. Apple with their Macintosh line of computers (which were made by them and had their own OS), although having superior products, were taken down by Microsoft, which didn’t manufacture any PC at all, but sold good-enough software for a large number of different manufacturers. Now Microsoft controls almost all of the desktop PC market mostly by owning the Windows ecosystem: most applications and games are developed to work with Windows, peripherals are made mostly Windows-compatible, drivers for hardware components are developed by manufacturers for Windows, etc.

By this initiative Sony effectively sets it’s goal on becoming the Microsoft of portable gaming in the future. The new PSP may be successful or may be a financial flop – it won’t matter if most of the top tier Android handset manufacturers will embrace the new “PlayStation Suite”. Sony will continue to get it’s slice of the pie from games, that are selling thru the PlayStation Store on all those handsets. And the ever growing smartphone market will ensure that the PlayStation Store has more and more customers. Well at least that’s in theory.

The end of PlayStation Portable?

While Sony’s plans are understandable, the stakes are high and so are the risks. The likelihood of fail is strong. Access to the PlayStation ecosystem from different non-Sony devices can and will cannibalize the sales of PSP, but that’s not the worst part, since the plan is to make money on the sales of games, not portable gaming consoles. The success of this venture is mostly tied to the success of the Android smartphone platform, which isn’t dominating the market and has competitors like Apple’s iOS, Microsoft’s Windows Phone 7, etc. Android’s competitors are far more into gaming (with Windows Phone 7 having Xbox Live integration and iOS being the current mobile gaming juggernaut) and more strictly controlled by their developers, so you probably won’t see the PlayStation Store on either Windows Phone 7 or iOS devices.

Even more problematic is the current state of the Android software market on which most of the profits by developers are made by ads, since the users aren’t really buying applications. Plus, the piracy rates are sky high, which isn’t very good thing when you are trying to sell expensive game titles. And it’s obvious that PlayStation games will be expensive – forget about 1.99 – 6.99 games from the Apple’s AppStore.

And don’t forget that Sony has a more natural competitor in the portable gaming market in the face of Nintendo with it’s new 3DS gaming console.

Considering all this, Sony could end up in a situation, when it kills it’s PSP by third-party “PlayStation Certified” smartphones, but won’t make enough money (as will the game developers) from the ecosystem to make it a viable project. But only time will tell whether it was a good decision or not.

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