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Sony handcuffs its handheld

Could PSP be the coolest thing ever? Maybe, but Sony's refusal to embrace universal standards could limit the appeal of the gaming/movie/music machine.

By JOSH KORR
Published March 23, 2005

For anyone used to dropping 50 bucks on a video game or $200 on a graphics card, Sony's new PSP (PlayStation Portable) will be a machine to drool over.

For those more accustomed to two-for-$15 DVD deals and dollar-a-song downloads, the handheld system will be a neat, unnecessary gadget their techie friends won't shut up about.

Somewhere in between lies mass-market saturation. But until Sony drops its stubborn insistence on proprietary everything, the PlayStation Portable will likely fall short of iPod ubiquity.

That's a shame, because the PSP is the coolest piece of consumer electronics since Apple decided a white MP3 player was the best way to simultaneously rebuild a brand and end all earthly conversation. The PSP "wow" factor starts immediately after opening the box: A sleek, obsidian casing topped with see-through shoulder buttons surrounds just about the biggest screen ever seen on a handheld device.

Pop in the Spider-Man 2 movie that comes with the first 1-million PSPs, and Sony doesn't seem far off in marketing the device as a multimedia revolution. The screen looks as sharp as a portable DVD player, but there's no bulky flip screen and DVD bay to worry about. The directional pad searches forward and backward at multiple speeds, while the shoulder buttons skip around by chapter. Two tiny speakers are worthless, but the movie comes alive through the included headphones.

Wipeout Pure, the only game Sony sent for review, is almost as impressive. Leaving Nintendo's Game Boy Advance and DS in its racing ships' wake, Wipeout blows away every handheld game I've seen.

The 3-D graphics and sheer speed had me leaning forward to try sticking my head through the screen. The edges of the ships and buildings have the unpolished jagged look that plagues PlayStation 2 games, but it's barely noticeable when you're whizzing around so fast.

But Wipeout would be fun as a $15 or $20 game; Spider-Man 2 might make sense as a $10 investment for a plane ride. The "wow" quickly becomes a "woah," as the economics of the video game industry collide with the business of consumer electronics.

Companies like Sony and Microsoft lose money on each PlayStation or Xbox sold, but make up for it on the game software through licensing fees that push prices up to about $50 per title. (How they came up with the $50 figure is unclear, but that's another story.)

This may not matter to gamers who have accepted the pricing model and will happily pay to play. But casual game players will probably be more hesitant - and the DVD-quality movies that should make the PSP attractive for them will be a turnoff at $20 to $30.

The problem is that Sony chose a propriety format - its own Universal Media Disc, or UMD - for games and movies, as well as its propriety Memory Stick (about $70 for a 512-megabyte card). So while DVDs become ever larger cash cows for Hollywood by getting ever cheaper and more feature-filled, and while the music industry looks to a future of individual song sales, Sony thinks people will want the PSP so badly they'll pay whatever the company tells them to.

Never mind that the 1.8-gigabyte UMDs don't have room for DVD extras, and that relatively few movies are planned for release (only two companies besides Sony have signed on).

Sony has been down this road before, with disastrous results. After giving Apple a huge head start in the digital music race, Sony launched its hard-drive based digital Walkman and Connect online music store last year to utter indifference.

Sony thought its name alone could sell a device with a restrictive music format at a time when universal playability was taking root in the digital music industry. The company recently lowered operating profit estimates, in part because of continually losing market share to Apple. So much for brand recognition.

The PSP is partly insulated against Sony's poor decisions. If the system really takes off, more movie studios will get on board, which could push prices down. Amazon is selling some of the first movies for $13.95. If it turns out you can easily rip and encode DVDs and transfer them to the PSP - and that the quality is half-decent - people might decide to ignore UMD movies, which could force Sony to lower the price or abandon them.

First-run games won't get cheaper, but that's not a deal killer since casual buyers will only get a couple of games anyway. The built-in wireless capabilities - go to a hotspot and you can play against other PSPers without plugging anything in - might even entice them to play more.

But with media and memory prices set so high for the PSP, the company doesn't seem to have learned its lesson from the Walkman debacle.

On the other hand, the two previous PlayStations moved gaming into the mainstream, so the PSP's success as a game machine is pretty much guaranteed. If Sony wants more, if total cultural domination is the goal, they better hope there are a lot more closet geeks out there than we think.

[Last modified March 23, 2005, 00:55:18]