PSP might not launch in March of 05

[Pepto-Bismol]

Let's wait and see the cost and the size of PSP, before passing any judgement.

Why? :?

We know PSP is going to be more costly than PS2. We know it will binge on battery power (making the whole notion of portability almost laughable). We are pretty sure its inception it will rival the PS2's conclusion software-wise, suggesting that there might be more than just an emulator under its bonnet ...

 

[Paul]

We know PSP is going to be more costly than PS2

Where did you buy your PSP from? I want to know.

 

[Pepto-Bismol]

So, this guy telling us that the PSP would start in its first generation where the ps2 leaves off (to takes its own words) is a bit like PR.

Ohmigod!!!

 

[Pepto-Bismol]

We know PSP is going to be more costly than PS2

Where did you buy your PSP from? I want to know.

It's an inference really.

PlayStation 2 prices are falling; PSP prices are not.

 

[Paul]

Oh no shit? I thought you mean't launch PS2 price(300). You may see a 200 dollar PSP though sure.

 

[thop]

I think SONY is pretty confused right now what PSP is supposed to be. They keep talking about it being the new walkman, just to introdruce another new walkman now: http://news.bbc.co.uk/1/hi/entertainment/music/3855745.stm

 

[Teasy]

I was just about to say that I really like the look of that Sony IPOD challenger. 20GB is easily more then enough space (who needs 40GB really??) and it looks so much smaller and nicer then IPOD. Then I read the following:

The Sony device will be incompatible with other online stores and cannot play tunes in the popular MP3 format.

Lunatics!!!...

 

[Pepto-Bismol]

You may see a 200 dollar PSP though sure.

So what you're saying is that that hideous, feature-laden PSP could debut at a more attractive price point than, say, the fashionably elegant iPod mini?

R-i-i-i-g-h-t. :|

 

[Paul]

You may see a 200 dollar PSP though sure.

So what you're saying is that that hideous, feature-laden PSP could debut at a more attractive price point than, say, the fashionably elegant iPod mini?

R-i-i-i-g-h-t. :|

Uhuh...

Go take a look at the profit margins on the mini, huge, and is proven by the fact that you can get a much bigger ipod for a little more money.

Unless people think Sony will be taking profit on PSP to begin with??? Don't make me laugh.

 

[rabidrabbit]

I was just about to say that I really like the look of that Sony IPOD challenger. 20GB is easily more then enough space (who needs 40GB really??) and it looks so much smaller and nicer then IPOD. Then I read the following:

The Sony device will be incompatible with other online stores and cannot play tunes in the popular MP3 format.

Lunatics!!!...

Can the iPod play MP3's?
I've been under the impression that it too uses some own format.

Edit: I checked, and the iPod can play MP3 and WAV.
But the iTunes Music Store uses AAC format.
Like the Sony's store uses also it's own format, but it is still unclear whether the PSP can play also MP3s.

 

[a688]

Go take a look at the profit margins on the mini, huge, and is proven by the fact that you can get a much bigger ipod for a little more money.

Unless people think Sony will be taking profit on PSP to begin with??? Don't make me laugh.

What do you know about the iPod's profit margins? The SMALLER iPod costs more to make since it uses smaller components. It costs more per unit or whatever you want to call it because of this. Sony has already stated in previous interviews posted here that they want to make money on the PSP right from the start.

 

[Paul]

What do you know about the iPod's profit margins? The SMALLER iPod costs more to make since it uses smaller components. It costs more per unit or whatever you want to call it because of this. Sony has already stated in previous interviews posted here that they want to make money on the PSP right from the start.

Apple makes money on IPODS.

Sony doesn't plan on making money on PSP hardware in the short term, much like PS2 was, or atleast not huge margins as someone like apple does with their ipods.

Sony's Kaz Hirai wasn't too pessimistic stating that, "If you just add up the components, day one there's probably not too much margin on the hardware," Kaz Hirai said in the article. "But when all is said and done, we are in the business to make money on the hardware and we have proven that with the PlayStation and the PS2."

""So if you're saying 'Day one, are you going to be profitable on the hardware?' then probably not," Hirai said. "Hopefully, this will have a 10-year lifecycle, at which point I'll look back and say 'Yes, definitely profitable."'"

 

[Psychogenics]

Gamesindustry.biz on the same thing.

Yup and I was about to post that link....

 

[Pepto-Bismol]

Sony doesn't plan on making money on PSP hardware in the short term, much like PS2 was, or atleast not huge margins as someone like apple does with their ipods.

To make an assertion about a company's business model, and then quote one of its executives saying the opposite doesn't exactly lend credence to your statement.

Sony's Kaz Hirai wasn't too pessimistic stating that, "If you just add up the components, day one there's probably not too much margin on the hardware," Kaz Hirai said in the article. "But when all is said and done, we are in the business to make money on the hardware and we have proven that with the PlayStation and the PS2."

Kaz isn't talking about losing money -- Sony plans to sell each unit for more than it costs to make it -- what he is talking about is the size of the (profit) margin. Initially, MSRP will be very close to actual cost. But with a fixed price point and increasing economies of scale, costs should fall and profit margins should "fly" ...



P.S. Sony's answer to iPod, the Network Walkman, should debut at a price below $400. Now it only makes sense that the more feature-rich PlayStation Portable would be positioned higher.

 

[Paul]

Oh no shit?

So what about this one?

"So if you're saying 'Day one, are you going to be profitable on the hardware?' then probably not," Hirai said. "Hopefully, this will have a 10-year lifecycle, at which point I'll look back and say 'Yes, definitely profitable."'

Why did Sony sell PS2 at a loss in the USA? To establish a mass market price. The same is going to happen in the USA with PSP, Sony will rip the japs off, however it's irrelevant; they will pay whatever price for PSP.

Now it only makes sense that the more feature-rich PlayStation Portable would be positioned higher.

Nu-uh. A walkman is different than a video game system which needs to gain market share in order to be successfull and stay alive. Period. Sony is making tons of profit on those walkmans, count on it.

 

[Tuttle]

It matters what profitable is referring to.

Does it mean per unit, price to manufacture vs sale price? Or does it mean the hardware costs as a whole - including research and development and overhead?

 

[cthellis42]

It pretty much can't include R&D because then EVERYTHING would be "unprofitable at launch."

The ultimate designs are, of course, to be profitable. But the process is adjustable.

 

[Fox5]

It's common cents actually.

Nintendo has a really bad habit of miniaturizing past technology. So games on its current handhelds resemble those on previous consoles.

But Sony has made their existing technology portable.

"First and foremost, the PlayStation Portable is a portable handheld gaming device that really simulates the PlayStation 2 in the home." – Kaz Hirai, president and CEO of SCEA

"I think that a game like Headhunger: Redemption would look almost the same on PSP. It's very powerful. Also, you have less of a fill rate, so the graphics chip basically has the same capability as the PS2. I think we can do some hefty stuff on it. At first, when they were only going to have 8 megs of RAM, that was a hassle, but now that it has 32, it is the same as PS2." – John Kroknes, producer Headhunter: Redemption

So while Miyamoto & Co. were licking their chops and getting ready to milk another cash calf before bringing a cow to the dairy farm, Sony moved a step ahead of them, technologically speaking.

Besides, PSP's abilities (and rainbow of supported formats) suggests that there IS something more potent than EE+GS inside ...

Umm......no nintendo system has ever used old technology.
GB was not NES.
GBC was at closest a smaller Game Gear.
GBA did not have SNES's hardware.
DS won't be an n64 like ique is.
Nintendo mimics functionality, but not hardware.(and that's mostly due to style, gba just has a really powerful cpu that can handle most of what snes's additional chips couild do, and ds already seems to produce 3d much different than n64)

 

[Pepto-Bismol]

So what about this one?

To reiterate: Sony is not losing money on hardware. What they stand to "lose" -- if you want to call it that -- are profits that fall short of expectations. So instead of pocketing, say, $2 million on PSP sales the first year, they may make half that, which is a profit nonetheless.

"So if you're saying 'Day one, are you going to be profitable on the hardware?' then probably not," Hirai said. "Hopefully, this will have a 10-year lifecycle, at which point I'll look back and say 'Yes, definitely profitable.'"

In the above quote Kaz states the obvious, namely, that Sony is unlikely to recoup all of its investment on the first day, despite selling each unit for more than its cost of production.

Think about it. Attempting to break even on launch day will, in all likelihood, defeat the purpose of mass-production.

For in order to foot the bill, that first batch must bear it, resulting in celestial costs of thousands (and maybe even tens of thousands) of dollars per unit. Mind you, we are talking about cost, not the retail price (cost + markup) that you and I would pay.

So that a few PSPs do not price themselves out of the market, lots and lots of them will share the burden.

Sales volume, then, is what Sony is banking on to pay its PSP tab. But this takes time. And it is one of the reasons Kaz is hoping the handheld has a longer-than-fad future.

Operating with a net margin, this venture, like previous ones, should start to pay dividends ...

As was the case with PS2 a couple of years ago and PSone nearly a decade prior, there will come a point in PSP's lifetime when revenues will offset all associated costs, the resulting surplus being reinvested or used to finance something else.

 

[Fox5]

PSP WILL NOT cost thousands of dollars per unit to make. Maybe if you factor in advertising, research, and all related costs with the PSP as the cost per unit, but the hardware won't cost thousands of dollars per unit.