When Apple reports its financials on October 19, the numbers will
include over 10 million iPhone OS devices (iPhones and iPod touches).
The total installed base will be over 60 million - more units sold in
27 months than Sony's Playstation Portable (PSP) has since its launch
at the end of 2004.
Over the next 12 months (Apple's Fiscal Year 2010), Apple should
sell at least another 50 million, bringing the total much closer to
that of the Nintendo DS and DSi (already over 100 million), and within
24 months, Apple's numbers will have overtaken the DS.
The billionth game will be downloaded from the App Store before the
New Year, if Toni Sacconaghi's (Bernstein Research) upper estimate of
38% of all App Store downloads is correct and sales continue to
increase as they have been. Even if the lower estimate of one third is
correct, the billionth game download will be before the end of February
2010. Sony, as of February 2009, had 200 million software sales.
Sony's Respons: PSPGo
Sony's response, the PSPGo, was finally launched on October 1. It
goes for $250, the same price as the first PSP. There will be the usual
flurry of early sales, but what happens over the Christmas period will
decide how fast the price drops. As the PSPGo lacks the proprietary
UMD
disc drive, it should be cheaper to manufacture than the PSP 3000, but
with Apple rewriting the rules
for games, Sony has to make sure it makes a profit from each
PSP.
The PSPGo has already been successful in one way - it has made the
8 GB iTouch look inexpensive at $199. The PSP screen resolution is
only 480 x 272 (the iTouch is 480 x 320), and games are sold online at
full retail price - but there is no right to resell and there is no way
for current users to transfer UMD games they already have to the new
hardware.
Sony has also built in the older 802.11b standard for downloading,
so it's slower than the iTouch and typically takes an hour for a good
sized game. You can't do anything else while downloading, and if the
signal is lost or cut off, you need to start over again. When the
costly proprietary cables (not USB, like for the older PSPs) are added
in, questions like why is Sony bothering come to mind. Sony is
bundling one game and giving three game credits to ease the pain and
try to jump-start the platform, but outside of Japan, where Sony still
enjoys a good reputation, how many will buy?
Comparing Costs
Many PSP users prefer to push the buttons, to control the games that
way. At least some of this is familiarity. They know this works for
them and are good at it, so why change? Let's look at the button
premium (App Store first).
Game iTouch Sony
Madden $9.99 $39.99
Scrabble $4.99 $19.99
The Sims 3 $6.99 $14.99 (Sims 2)
Hero of Sparta $1.99 $6.99
Fieldrunners $2.99 $6.99
Sudoku $4.99 $4.99
Sony's problem is that the PSPGo, even with four free premium games
like Madden, costs more than the $199 iTouch plus buying four premium
games, and the average PSP user only buys four titles, not all of them
games.
Developer Costs
It costs more for developers, too. Sony and Nintendo charge for
their Software Development Kits, whereas Apple's is free. $1,000 for
the PSPGo version means that a small developer needs to be sure there
is a market.
A game also has to be rated by the ESRB before Sony or Nintendo (or
Microsoft for the Xbox 360) is willing to sell it in the US. There are
similar rating programs in Europe and Japan. For a low cost game, the
ESRB fee is $800; for a premium game, $2,500- and games in the App
Store are rated by Apple and the developers.
For developers, it is cheaper to try out any new game on the iPhone
and iPod Touch. If it is really successful, then they can port it to
the other platforms.
Hard-core Gamers
For hard-core gamers, handhelds like the PSP and DSi are to fill in
travel time. Real game time is on the Xbox 360, Playstation 3, or a
PC.
As soon as iTouch first becomes the usual game developer strategy,
will gamers wait for ports that are more expensive when the best they
can usually hope for is that the controls are mapped across correctly
and bonus material, such as extra levels, is rare? Especially when the
ports sometimes aren't as good as the original games.
Kotaku on Hero of Sparta:
"Simplistic controls, muddled graphics and abysmal sounds turn what was
a fantastic iPhone game into a oddly disjointed Playstation Portable
experience."
The Sega Solution
Sony and Nintendo have one large advantage over Apple: They make
some great games themselves, and naturally these are kept as exclusives
for their platforms. While these continue to sell in big enough
numbers, the PSP and DSi platforms can keep going.
The time will come, though, as it did for Sega, when Sony and
Nintendo can make more from selling games on other platforms than in
keeping their platforms going.
Apple has been after a major slice of the games pie since the launch
of the App Store featured Sega's Super Monkey Ball. It is now ready to
take over the handheld games market. 
Further Reading
